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OF 

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OF  CALIFORNIA 

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AN  INTRODUCTION  TO  THE 
STUDY  OF  LABOR  PROBLEMS 


CROWELL'S 
SOCIAL    SCIENCE    SERIES 

EDITED   BY 

SEBA  ELDRIDGE 
Department  of  Sociology,  University  of  Kansas 

Principles  of  the  New  Economics 

By  Lionel  D.  Edie,  University  of  Indiana 

An  Introduction  to  the  Study  of  Labor  Problems 

By  Gordon  S.  Watkins,  University  of  Illinois 
Man  and  Culture 

By  Clark  Wissler,  American  Museum  of  Natu- 
ral History 

A  Study  of  International  Government 

By  Jessie  Wallace  Hughan,  Ph.D. 

IN  PREPARATION 

History  of  Socialism 

By  Harry  W.  Laidler 
Principles  of  Public  Finance 

By  Jens  Jensen 
Community  Organization 

By  Clarence  E.  Rainwater 

The  American  Race  Problem 
By  E.  B.  Reuter 

THOMAS  Y.   CROWELL   COMPANY 


AN  INTRODUCTION  TO  THE 
STUDY  OF  LABOR  PROBLEMS 


BY 

GORDON  S.  WATKINS,  PH.D. 

Associate  Professor  of  Economics,   University  of  Illinois 


CROWELL'S  SOCIAL  SCIENCE  SERIES 

EDITED  BT 

SEBA    ELDRIDGE 
University  of  Kansas 


NEW  YORK 

THOMAS  Y.  CROWELL  COMPANY 

PUBLISHERS 


Copyright,  1922, 
By  THOMAS  Y.  CROWELL  COMPANY 


Fourth  Printing 


Printed  in  the  United  Statet  of  America 


Bus.  Admin. 
Library; 

tffi 

WO) 


TO 

Jams  Watkttts 

WHOSE  DEEP  INTEREST  AND  COOPERATION 

HAVE  BEEN  MY  INSPIRATION 
IN  THE  PREPARATION  OF  THIS  WORK 


1587037 


EDITOR'S  NOTE 

TEACHERS  of  economics  have  long  felt  the  need  of  a  com- 
prehensive and  thorough,  but  not  too  voluminous,  treatment 
of  labor  problems.  The  present  treatise,  we  believe,  will 
meet  this  need.  The  author  displays  a  fine  sense  of  propor- 
tion in  dealing  with  these  problems,  and  the  various  solu- 
tions that  have  been  proposed  for  them.  Perhaps  the  most 
admirable  features  of  Professor  Watkins '  treatment  are  his 
orderly  marshaling  of  the  facts  that  bear  on  the  problems 
treated,  and  his  impartial,  yet  critical  interpretation  of  con- 
flicting views  thereon. 

The  book  should  commend  itself  not  only  to  teachers  and 
students,  but  to  social  workers,  editors  and  others  who  feel 
the  need  for  a  work  of  reference,  in  brief  compass,  on  this 
subject. 

S.  E. 


PREFACE 

This  book  is  intended  to  be  what  its  title  suggests — an 
introduction  to  the  study  of  the  problems  of  industrial  rela- 
tions. Its  main  purposes  are  to  acquaint  the  student  and 
the  general  reader  with  the  facts  and  conditions  that  in- 
fluence these  relations,  and  to  describe  and  evaluate  the 
important  remedies  that  have  been  proposed  and  applied. 

The  problems  of  industrial  relations  are  the  resultants 
of  ascertainable  causes,  of  material  and  subjective  forces 
that  function  persistently  in  the  evolution  of  industrial 
society.  These  problems  cannot  be  understood  apart  from 
the  experiences  of  the  past  and  the  conditions  of  the  present. 
Yet  no  set  of  problems  has  evoked  more  superficial  judg- 
ment and  more  unwarranted  conclusions.  There  is  impera- 
tive need  for  careful  examination  of  the  factors  that  enter 
into  industrial  strife.  The  causes  of  unrest  are  anchored 
deep  in  the  organization  and  operation  of  industry ;  strikes 
and  lockouts  are  symptomatic  of  unremedied  but  remediable 
maladjustments  in  the  industrial  system.  Ultimately,  im- 
provement can  come  only  through  a  general  sympathetic 
appreciation  of  human  forces  in  industry  and  complete 
knowledge  of  those  conditions  of  production  and  distribu- 
tion that  stifle  self-expression,  balk  fundamental  instincts 
and  desires,  prevent  the  development  of  personality,  and 
breed  incessant  antagonism  and  strife.  The  acquisition  of 
such  knowledge  and  the  development  of  sympathetic  ap- 
preciation constitute  a  first  duty  of  constructive  citizenship. 
This  book  is  offered  in  the  hope  that  it  may  contribute  some- 
thing to  a  broader  understanding  of  the  serious  problems 
of  capital  and  labor.  The  field  is  so  comprehensive  that 
only  a  general  outline  is  possible  within  the  limits  of  a  single 
volume.  The  references  at  the  close  of  each  chapter  will 
assist  the  reader  in  making  a  more  intensive  study  of  the 
subjects  discussed. 

Yii 


viii  Preface 

The  treatment  of  labor  problems  which  this  book  at- 
tempts is  not  merely  an  expression  of  academic  interest  but 
an  embodiment  of  first-hand  observations  of  the  author  as 
a  wage-earner  in  mines  and  machine  industries. 

An  earnest  attempt  has  been  made  to  introduce  adequate 
statistical  evidence  and  authoritative  opinion  in  the  analysis 
of  each  problem  and  remedy,  and  to  examine  all  data  care^ 
fully  before  formulating  definite  conclusions.  The  author 
holds  no  brief  for  either  employers  or  wage-earners  as  a 
class;  his  chief  concern  has  been  to  analyze  and  describe 
those  maladjustments  in  industry  which  impede  industrial 
and  social  progress. 

The  author  is  indebted  to  Professor  Seba  Eldridge,  Uni- 
versity of  Kansas,  and  Professor  E.  L.  Bogart,  University 
of  Illinois,  for  their  valuable  criticisms;  to  Miss  Hazel 
Yearsley  Shaw,  University  of  Illinois,  for  her  helpful  sug- 
gestions and  efforts  in  arranging  the  selected  references; 
and  to  his  wife,  Anna  Davis  Watkins,  whose  cooperation 
in  the  preparation  and  reading  of  the  manuscript  has  made 
this  Work  possible* 
UnfiANA,  ILLINOIS, 

Jtily  1,  1922. 


CONTENTS 

PART  ONE 

THE  NATURE  AND  DEVELOPMENT  OF  THE  PROBLEMS 
CHAPTER    I 

PAOV 

THE  NATURE  OF  THE  PROBLEMS  .       .       ...'...      1 

Definition — The  Necessity  of  a  Scientific  Attitude — The 
Evolutionary  Concept  of  Society — Fundamental  Insti- 
tutions that  Affect  Industrial  Relations — The  Parties  to 
Industry — The  Relation  of  the  Study  of  Labor  Problems 
to  the  Social  Sciences — Methods  of  Study — Outline  of 
the  Present  Study, 

CHAPTER  II 

THE  EMERGENCE  OF  LABOR  PROBLEMS  IN  ENGLAND      .       .      9 

Conditions  Determining  the  Evolution  of  Industrial 
Society — Systems  of  Labor  in  the  Evolution  of  Economic 
Society — The  Rise  of  Modern  Industrialism — The  Effects 
of  the  Industrial  Revolution — Conclusions. 

CHAPTER  III 

THE   DEVELOPMENT  or  LABOR  PROBLEMS  IN  THK  UNITED 

STATES    «»...»      k       ....     24 

The  Genesis  of  National  Life-^-Historio  Ideals — Industry 
and  Labor  in  the  Colonial  Period — Indentured  Servants — 
Slave  Labor — The  Development  of  the  Factory  System — 
The  Growth  of  Manufactures  and  the  Integration  of 
Industry — The  Growth  of  Population — The  Influence  ot 
Free  Land  on  the  Problems  of  Labor — Conclusions. 

iz 


x  Contents 

PART  Two 

ANALYSIS  OF  THE  PROBLEMS 
CHAPTER  IV 

PAOB 

THE  STANDARD  OP  LIVING  .  j*j"/rY  V  *  *  *  -41 
The  Standard  of  Living — Types  of  Standards  of  Living 
and  Budget  Levels — The  Minimum  Quantity  Standard 
—The  Minimum  Quantity  Standard  Not  Ideal — Chang- 
ing Items  in  the  Cost  of  Living — The  Standard  of  Liv- 
ing as  a  Basis  for  Wage  Adjustments — Conclusions. 

CHAPTER  V 

WEALTH,  INCOME,  AND  WAGES     .       .       .       .       .       .       .56 

Definitions — Wealth  and  Economic  Status — The  Distribu- 
tion of  Wealth  and  Income — The  Earnings  of  Labor- 
Some  Social  By-Products  of  Low  Wages — Wage  Scales 
as  an  Index  of  Earnings — The  Economy  of  Adequate 
Wages — Conclusions. 

CHAPTER  VI 

THE  DETERMINATION  OF  WAGES 69 

The  Wage  System — The  Problem  of  Distribution  in  Rela- 
tion to  Labor — The  Cost  of  Subsistence  Theory — The 
Wages-Fund  Doctrine-^-The  Residual  Claimant  Theory — 
The  Specific  Productivity  Theory — The  Normal  Value 
or  Exchange  Theory — The  Bargaining  Theory — The 
Socialist  Explanation  of  Wages — Miscellaneous  Theories 
— The  Peculiar  Characteristics  of  the  Labor  Supply — 
The  Wage  Bargain — Conclusions. 

CHAPTER  VII 

HOURS  OF  LABOR     .       .       .Ji'Tl*!/ >.'') 97 

The  Nature  of  the  Problem — Development  of  the  Problem 
in  England — Development  of  the  Problem  in  the  United 
States — The  Advantages  and  Disadvantages  of  the 
Shorter  Work-day — The  Twelve-Hour  Day  and  the 
Continuous  Shift  System — The  Comparative  Productivity 
of  Night  Work  and  Day  Work — Overtime  and  Its  Abuses 
— Sunday  Labor — Hours  of  Labor  in  Relation  to  Output — 
The  Testimony  of  Industrial  Commissions — The  Move- 
ment for  the  Eight-Hour  Day — Conclusions. 


Contents  xi 


CHAPTER  VIII 

PAGE 

CHILD  LABOR 120 

The  Problem — Development  of  the  Problem  in  England — 
Rise  of  the  Problem  in  the  United  States — Recent  Growth 
of  Child  Labor — The  Occupations  of  Children — The 
Wages  of  Child  Workers — Conditions  of  Employment — 
The  Instability  of  Child  Workers — Unemployment  Among 
Children — Accidents  and  Sickness — Economic  Effects  of 
Child  Labor — Reasons  for  the  Employment  of  Children — 
The  Loss  of  Educational  Opportunity — Moral  Aspects 
of  the  Problem — Minimum  Standards  of  Employment — 
Conclusions. 

CHAPTER  IX 

WOMEN  IN  INDUSTRY  .  .  .:f  • .  .  .,-'<  .-.;••.  k-  :*»}-<  .  146 
Woman  as  an  Economic  Factor — The  Growth  of  the  Em- 
ployment of  Women  —  Present-Day  Occupations  of 
Women — Competition  with  Men — The  Wages  of  Women 
in  Industry — Why  Women's  Wages  are  Low — Equal  Pay 
for  Equal  Work — The  Efficiency  of  Women  Workers — 
Women's  Industrial  Training — The  Problem  of  Hours — 
Labor  Turnover  and  Unemployment  Among  Women — 
Married  Women  in  Industry — The  Sweating  System 
and  Industrial  Homework — Standards  of  Employment — 
Conclusions. 

CHAPTER  X 

HUMAN  WASTE  IN  INDUSTRY  ;  .  .'•  .  ,fV.  .^-  .  189 
The  Human  Factor  in  Production — Extent  of  Industrial 
Accidents — Occupational  Distribution  of  Accidents — 
The  Causes  of  Industrial  Accidents — The  Cost  Involved 
— Occupational  Diseases — Responsibility  of  Employers 
and  Employees  in  Occupational  Diseases — The  Social 
and  Economic  Waste — Industrial  Fatigue — Fatigue  as  a 
Factor  in  Industrial  Accidents — Wage-Earners  and  the 
Financial  Burden  of  Accidents — Conclusions. 

CHAPTER  XI 

UNEMPLOYMENT.       .       .    ^.  '  '.    ". 209 

The  Nature  of  Unemployment — The  Social  and  Economic 
Significance  of  the  Problem — Demand  and  Supply  in 
Relation  to  Unemployment — The  Extent  of  Unemploy- 
ment— The  Causes  of  Unemployment — The  Migratory 
Worker — The  Incidence  of  Unemployment — Methods 
Suggested  for  the  Reduction  and  Prevention  of  Unem- 
ployment— Conclusions. 


xii  Contents 


LABOR  TURNOVER    .       .       ......   .-"  !i  !    .  260 

Definition — Extent  of  Labor  Turnover — The  Nature  of 
Separations — Computation  of  Labor  Turnover — The 
Causes  of  Labor  Turnover — Skill  and  Sex  in  Relation  to 
Turnover — The  Economic  Waste  of  Labor  Turnover — 
The  Social  Aspects  of  Labor  Turnover — Methods  of 
Reducing  Labor  Turnover — Conclusions, 

CHAPTER  XIII 

IMMIGRATION 264 

Immigration  in  Relation  to  Population — History  of  Immi- 
gration in  the  United  States — Causes  of  Immigration — 
The  Changing  Character  of  Immigration — Points  of  View 
— Distribution  of  Immigrants — Economic  Aspects  of  the 
Immigration  Problem — Political  Elements  in  the  Prob- 
lem— Immigration  as  a  Factor  in  Illiteracy — The  Padrone 
System — The  Case  for  Restriction — The  Development 
of  Opposition  and  Legislation — Oriental  Immigration — 
Conclusions. 

CHAPTER  XIV 

INDUSTRIAL  UNREST •'.       .       .  298 

An  Inclusive  Problem — Definitions — The  Development  of 
Strikes  and  Lockouts  in  the  United  States — The  Economic 
Waste  of  Strikes  and  Lockouts — Causes  Of  Industrial 
Unrest — The  Legal  Status  of  Unions  and  Union  Methods — 
The  Use  of  the  Injunction  in  Industrial  Disputes — Vio- 
lence and  Force  in  Strikes — Conclusions, 


PART  THREE 
AGENCIES  AND  METHODS  OF  READJUSTMENT 

CHAPTER  XV 

LABOR  ORGANIZATIONS — HISTORY  AND  TYPES  »  )•>/•  •*  ,  330 
The  Reasons  for  Organization — Types  of  Unionism — The 
Origin  of  Trade  Unionism— The  Emergence  of  Trade 
Unionism,  1792-1827 — Utopianism  and  Political  Experi- 
ments, 1827-1850 — Reorganization  and  the  Beginning 
of  Nationalization,  1850-1857 — Revival  of  Trade  Union- 
ism, 1857-1866 — Attempted  Amalgamation,  1866-1886*-1 


Contents  xiii 

PAO» 

The  Predominance  of  Federation  and  the  Rise  of  Indus- 
trial Unionism,  1886  to  the  Present — Summary  of  His- 
torical Lessons — The  International  Growth  of  Unionism — 
Women  and  Trade  Unionism. 

CHAPTER  XVI 

LABOR  ORGANIZATIONS — GOVERNMENT,  AIMS,  AND  PRACTICES  363 
Government — The  Aims  and  Ideals  of  Organized  Labor — 
The  Practices  of  Unionism — The  Open  Shop  Versus  the 
Closed  Shop — Political  Action — Jurisdictions!  Disputes — 
Labor  Organizations  and  Education — Some  Recent 
Tendencies — Incorporation  of  Labor  Organizations — 
Conclusions. 

CHAPTER  XVII 

EMPLOYERS'  ASSOCIATIONS  ,  :v  ,,*  V  »  '  •  -•••  .  389 
Reasons  for  Existence  —  Development  —  Types  —  Govern- 
ment, Methods,  and  Policies — Examples  of  Successful 
Employers'  Organizations — The  Achievements  of  Em- 
ployers' Associations — The  Attitude  of  Organized  Labor 
Toward  Employers'  Associations — Economic  and  Social 
Justification — Conclusions. 

CHAPTER  XVIII 

THE  ADJUSTMENT  OF  INDUSTRIAL,  DISPUTES  .  ,  ,  .415 
Force  Versus  Law  in  Industry — Definitions — Laws  and 
Activities  of  the  Federal  Government — State  Legislation — 
Legislation  in  Other  Countries — Advantages  and  Disad- 
vantages of  Mediation  and  Arbitration — Trade  Agree- 
ments— A  National  System  of  Adjustment  Proposed — 
Conclusions. 

CHAPTER  XIX 

SHOP  COMMITTEES  AND  INDUSTRIAL  COUNCILS  .  . .  f  449 
Political  and  Industrial  Democracy — The  Nature  of  Shop 
Committees,  Works  Councils,  and  Industrial  Councils — 
Reasons  for  Establishing  Committees  and  Councils— 
Historical  Development — Types  and  Structure— Consti- 
tution and  Methods  of  Procedure — Functions — Preoaur 
lions  Followed  in  Introducing  Representation  Plans — 
Typical  Plans  in  the  United  States— Organized  Labor's 
Objections  to  Company  Uniona — The  Success  of  Plant 
Representation  Plans  in  the  United  States — Industrial 
Councils — Conclusions. 


xiv  Contents 


CHAPTER  XX 

r*M 

PERSONNEL  ADMINISTRATION  :;,.  ,.'i '^.  Vax>  •  •  •  475 
Scientific  Management— The  Science  of  Personnel  Adminis- 
tration— The  Personnel  Department  and  Its  Functions — 
Employment  Policies  and  Methods — Job  Analysis  and 
Specification — Transfers  and  Promotions — Grievances  and 
Discharges — Health  Measures  for  Employees — Comforts 
and  Conveniences — The  Safety-First  Movement — Recrea- 
tion— Economic  Betterment  Plans — Other  Welfare  Serv- 
ice— Administration — Conclusions. 

CHAPTER  XXI 

PROFIT-SHARING  AND  LABOR  COPARTNERSHIP  .  .*&»-.  .  .  498 
Methods  of  Industrial  Remuneration — The  Nature  of  Profit- 
Sharing — The  Purposes  of  Profit-Sharing — Forms  and 
Methods — Determination  of  the  Bonus—Conditions  of 
Participation — Historical  Sketch — Types  of  Establish- 
ments in  Which  Profit-Sharing  is  Applied — Labor  Co- 
partnership—Examples of  Successful  Profit-Sharing  and 
Copartnership — Loss-Sharing — The  Deficiencies  of  Profit- 
Sharing — The  Benefits  of  Profit-Sharing — Conclusions. 

CHAPTER  XXII 

INDUSTRIAL  EDUCATION  AND  TRAINING 519 

The  Need  for  Technical  Education — Vocational  Education  in 
the  United  States — Training  in  Industry — Fundamental 
Principles  and»Methods  in  Industrial  Training — Organiza- 
tion and  Operation  of  the  Separate  Training  Department — 
Examples  of  Corporation  Schools  and  Apprenticeships — 
The  Advantages  of  Vocational  Education—Conclusions. 

CHAPTER  XXIII 

COOPERATION     .       .       «"*'•" *,JK-;t    ;  * ***^ 

The  Importance  of  Cooperation  in  Relation  to  Labor  Prob- 
lems— The  Nature  and  Forms  of  Cooperation — Distin- 
guishing Characteristics  of  Consumers'  Societies — Histo- 
rical Sketch  of  the  Cooperative  Movement  in  the  United 
Kingdom — The  Cooperative  Movement  in  the  United 
States — Reasons  for  Slow  Development  in  the  United 
States — Development  of  Producers'  Cooperation — Reasons 
for  the  Failure  of  Producers'  Cooperation — Distributors' 
Cooperation  in  the  United  States — Cooperative  Credit 
Societies — Cooperative  Banking  Experiments  in  Great 
Britain  and  the  United  States — Criticism  of  Cooperation 
— Conclusions. 


Contents  xv 

CHAPTER  XXIV 

PA  OB 

SOCIALISM 566 

Socialism  Defined — Types  of  Socialism — Socialism,  Trade 
Unionism,  Syndicalism,  and  Anarchism — The  Socialist 
Internationals — The  Socialist  Indictment  of  Capitalism — 
The  Doctrines  of  Marxian  Socialism — The  Aims  of 
Socialism — Objections  to  Socialism — The  Growth  of 
Socialism — Reasons  for  the  Growth  of  Socialism — Recent 
Developments  in  the  United  States — Tendencies  Toward 
Socialism — Conclusions. 

CHAPTER  XXV 

LABOR  LEGISLATION 592 

The  Functions  of  Law  in  Relation  to  Labor — The  Develop- 
ment of  Labor  Legislation — Legal  Protection  of  Children 
— Protective  Legislation  for  Women — Minimum  Wage 
Laws — Law  and  the  Employment  of  Adult  Male  Workers 
— Regulation  of  the  Physical  Conditions  of  Employment — 
Protection  of  the  Worker  as  Debtor  and  Creditor — The 
Courts  and  the  Constitutionality  of  Labor  Laws — Con- 
clusions. 

CHAPTER  XXVI 
SOCIAL  INSURANCE  .       . 621 

The  Nature  of  Social  Insurance — Employers'  Liability — 
Workmen's  Compensation  Laws — Health  Insurance — 
Old  Age  Pensions — Mothers'  Pensions — Unemployment 
Insurance — Associations  for  the  Promotion  of  Labor  Laws 
and  Social  Insurance — Conclusions. 

CHAPTER  XXVII 

THE  BASIS  OF  PROGRESS       . 643 

The  Need  of  a  New  Motive  in  Industry — General  Principles 
of  Procedure — Social  Expediency  and  Social  Control. 

INDEX        ....  .  651 


AN    INTRODUCTION   TO  THE 
STUDY  OF  LABOR  PROBLEMS 

PART  ONE 

THE  NATURE  AND  DEVELOPMENT 
OF  THE  PROBLEMS 

CHAPTER  I 
THE  NATURE  OF  THE  PROBLEMS 

Definition. — There  obtains  no  unanimity  of  opinion  con- 
cerning the  nature  of  the  so-called  labor  problem.  To 
different  minds  the  problem  may  be  primarily  one  of 
improving  the  general  conditions  of  employment;  the 
successful  organization  of  the  workers  and  freedom  of 
collective  bargaining;  the  economic  and  social  conse- 
quences of  trade  unionism;  the  elimination  of  distrust 
born  of  fear  and  the  substitution  therefor  of  mutual 
confidence;  the  discovery  and  application  of  effective 
methods  of  adjusting  industrial  disputes  and  grievances; 
the  prevention  of  labor  unrest;  the  promotion  of  indus- 
trial goodwill  and  industrial  efficiency;  or' any  one  of  the 
myriad  phases  of  relations  between  employers  and  em- 
ployees. To  one  authority,  "  American  trade  unionism 
is  the  American  labor  problem ;  and,  in  a  narrow  accepta- 
tion, trade  union  policy  and  practice  impinge  at  some 
point  or  other  upon  such  specific  social  problems  as  immi- 
gration, child  labor,  employers'  liability,  and  methods  of 
industrial  remuneration."1  To  another  authority,  "The 

1  Hollander  and  Barnett,  Studies  in  American  Trade  Vnionum,  p.  3. 

1 


2  The  Nature  of  the  Problems 

fluctuation  of  currency  is  the  greatest  of  all  the  labor 
problems"  and  "the  first  great  method  of  importance  in 
bringing  about  industrial  peace  is  the  stabilizing  of  the 
dollar. ' ' 2  Varying  conceptions  of  the  labor  problem 
could  be  enumerated  ad  infinitum. 

There  is  no  such  thing  as  the  labor  problem,  the  solution 
of  which  would  carry  with  it  a  panacea  for  all  industrial 
ills.  More  accurately,  there  are  many  labor  problems, 
some  of  which  are  of  a  specific  nature  in  that  they  neces- 
sitate improvement  in  particular  industrial  conditions, 
while  others  are  more  general,  involving  fundamental 
changes  in  the  administration  and  control  of  industry. 
Specific  problems  include,  among  others:  (1)  the  economic 
insecurity  of  the  workers;  (2)  repetitious  industrial  un- 
rest; (3)  unsatisfactory  conditions  of  employment;  (4) 
child  labor;  (5)  limitation  of  output;  (6)  inequality  of 
bargaining ;  (7)  human  waste  in  industry ;  (8)  unemploy- 
ment and  labor  turnover;  (9)  immigration;  and  (10) 
women  in  industry.  General  problems  include:  (1)  the 
democratization- of  industry ;  (2)  an  equitable  distribution 
of  the  product  of  industry;  and  (3)  social  control  of  in- 
dustrial life  witli  a  view  to  safeguarding  the  interests 
of  society. 

The  Necessity  of  a  Scientific  Attitude. — The  study  of 
labor  problems  must  be  approached  with  open-minded- 
ness  and  impartiality.  Such  an  attitude  is  prerequisite 
to  a  proper  understanding  of  facts,  a  full  appreciation 
of  opinions,  and  the  passing  of  sound  judgments.  In  no 
other  field  of  investigation  are  there  so  many  precon- 
ceived ideas  and  predetermined  convictions.  Public  dis- 
cussions of  trade  unionism,  wages,  and  hours  of  labor, 
for  example,  frequently  have  no  foundation  in  fact  and 
are  characterized  by  extreme  bias.  This  may  be  ac- 
counted for  partly  by  the  fact  that  labor  problems  are 
so  full  of  human  interest  that  almost  everyone  forms 
definite  opinions  regarding  them,  and  partly  because  in- 
dividuals approach  the  discussion  influenced  by  a  back- 

1  John  E.  Commons,  Trade  Unionism  and  Labor  Problems,  1921  ed., 
p.  4. 


The  Nature  of  the  Problems  3 

ground  of  tradition  and  training  which  forces  them,  con- 
sciously or  unconsciously,  to  take  sides  in  the  controversy 
between  capital  and  labor.  There  should  be  preserved 
that  scientific  attitude  defined  so  clearly  by  the  late  Pro- 
fessor Hoxie:  "It  is  putting  aside  as  far  as  possible  all 
passion  and  prejudice,  all  preconceived  notions  in  regard 
to  the  object  of  study,  all  beliefs  and  feelings;  seeking 
only  for  the  truth  and  being  willing  to  follow  it  to  what- 
ever conclusions  it  may  lead."3 

The  Evolutionary  Concept  of  Society. — A  proper  under- 
standing of  the  problems  of  labor  is  impossible  without 
first  securing  an  accurate  conception  of  industrial  and 
social  life.  Social  relations  are  the  product  of  evolution, 
and  change  is  their  dominant  characteristic.  Resistance 
to  change  is  a  fundamental  factor  underlying  the  malad- 
justments in  industrial  society.  Two  distinctly  different 
conceptions  of  industrial  and  social  life  obtain;  namely, 
the  absolute  and  the  relative  concepts.  According  to  the 
former,  social  justice  and  the  common  welfare  consist  in 
maintaining  the  status  quo  in  social,  economic,  political, 
and  legal  institutions  and  relations.  Consequently  there 
must  be  no  limitations  of  private  property,  contract,  bar- 
gaining, competition,  inheritance,  freedom  of  the  individ- 
ual, or  any  vested  right  and  interest.  The  latter,  or 
relative  and  evolutionary  concept,  assumes  that  social 
justice  and  progress  consist  in  the  adaptation  of  all  in- 
stitutions to  the  imperative  needs  and  circumstances  of 
the  present.  This  will  involve  necessarily  a  denial  of  a 
fixed  natural  order  and  a  limitation  of  so-called  inalien- 
able righta  of  private  property,  liberty,  freedom  of  con- 
tract, and  free  competition.  The  philosophy  of  "What- 
ever is,  is  right"  constitutes  a  fundamental  denial  of 
social  and  economic  evolution.  To  deny  the  value  of 
present  institutions,  however,  is  equally  fallacious.  Even 
the  most  revolutionary  changes  have  some  necessary 
foundation  in  preexisting  institutions,  and  to  dispense 
with  all  social  antecedents  is  as  futile  as  it  is  disastrous. 
In  discussing  problems  and  relations  in  industry,  there- 

•B.  F.  Hoxie,  Trade  Unionism  in  the  United  State*,  p.  21. 


fore,  it  is  necessary  to  keep  in  mind  that  economic  life 
is  constantly  undergoing  readjustment. 

Fundamental  Institutions  that  Affect  Industrial  Rela- 
tions.— In  the  course  of  evolution  man  has  built  up  a 
network  of  institutions  that  tend  to  regularize  and  control 
the  economic  activities  of  his  daily  life,  The  present 
social  order  is  characterized  by  division  of  labor,  ex- 
change of  goods,  legal  contracts  and  agreements,  economic 
classes,  private  property,  vested  interests,  inheritance, 
competition,  monopoly,  large-scale  industry,  cooperative 
enterprise,  self-interest,  the  wage  system,  freedom  of  con- 
tract, state  regulation,  and  numerous  other  institutions 
and  practices  that  influence  industrial  relations.  Private 
property  vests  in  the  employer  the  exclusive  right  to  own 
and  control  those  material  things  that  make  production 
possible,  and  the  doctrine  of  freedom  of  contract  enables 
him  to  claim  the  right  to  run  his  business  as  he  sees  fit. 
Wage-earners,  on  the  other  hand,  claim  the  right  to  or- 
ganization and  collective  bargaining,  the  exercise  of  which 
may  interfere  with  the  rights  of  the  employer.  Similarly, 
it  might  be  shown  that  the  other  institutions  just 
enumerated  protect  or  limit  the  economic  status  of  em- 
ployers and  wage-earners. 

The  Parties  to  Industry. — A  common  practice  takes 
cognizance  of  only  two  parties  to  industry — capital  and 
labor.  The  interests  of  these  two  groups,  however,  are 
not  the  only  ones  to  be  considered.  There  is  increasing 
recognition  of  the  fact  that  the  parties  to  industry  include 
labor,  capital,  management,  and  the  public.  One  of  the 
outstanding  facts  of  man's  economic  life  is  that  material 
goods,  which  are  essential  to  the  satisfaction  of  human 
wants,  must  be  economized.  Saving  and  investment, 
therefore,  are  prerequisite  to  the  production  and  distribu- 
tion of  wealth  under  modern  industrialism.  Capital,  de- 
fined as  the  product  of  past  industry  used  in  further 
production,  is  indispensable  to  the  continuity  of  economic 
life.  The  owners  of  capital,  commonly  known  as  the 
capitalists,  have  direct  interests  in  industry  to  be  safe- 
guarded. When  labor  is  referred  to  as  a  factor  in  indus- 


The  Nature  of  the  Problems  5 

try  the  great  mass  of  wage-earners,  skilled  and  unskilled, 
is  meant.  Management  furnishes  intelligence  and  ex- 
perience in  the  direction  and  administration  of  industry. 
An  important  result  of  the  division  of  functions  in  modern 
industry  is  that  the  managers  of  industrial  enterprises 
are  frequently  not  the  owners,  so  their  interests  are  not 
identical  with  those  of  the  capitalists.  The  term  "public" 
designates  an  all-inclusive  body  of  consumers  whose  in- 
terests and  welfare  may  be  affected  directly  by  maladjust- 
ments in  industry  and  in  industrial  relations.  This  body 
of  consumers  includes  the  owners  of  capital,  industrial 
managers,  salaried  persons  and  others  in  the  professional 
classes,  wage-earners,  and  all  other  members  of  society. 

Society  is  directly  or  indirectly  a  party  to  every  indus- 
trial compact,  since  the  production,  exchange,  and  dis- 
tribution of  wealth  are  in  a  large  measure  determined 
by  existing  economic  and  political  institutions  which  have 
their  foundations  in  law.  Institutions  and  the  legal  sanc- 
tion upon  which  they  rest  may  be  out  of  joint  with  tho 
thought  and  philosophy  of  the  present,  but  the  machinery 
of  democratic  government  affords  an  opportunity  for 
orderly  readjustment  when  the  will  of  the  majority  so 
demands.  It  is  one  of  the  peculiar  functions  of  govern- 
ment to  maintain  law  and  order  in  industry,  and  in  ful- 
filling this  obligation  the  state  becomes  an  active  par- 
ticipant in  industrial  relations.  Industrial  strife,  inade- 
quate wages,  excessive  hours,  unsatisfactory  physical 
conditions  of  labor,  and  similar  maladjustments  affect 
directly  the  health,  efficiency,  and  progress  of  the  nation. 
It  thus  becomes  increasingly  necessary  for  society, 
through  the  machinery  of  government,  to  protect  the  in- 
terests of  all  its  citizens. 

The  Relation  of  the  Study  of  Labor  Problems  to  the 
Social  Sciences. — The  study  of  labor  problems  is  funda- 
mentally a  part  of  the  social  science  of  Economics,  but 
it  is  related  definitely  to  Sociology,  History,  Politics,  Law, 
Ethics,  and  Psychology.  Economics,  defined  as  the  social 
science  that  deals  with  man's  efforts  to  procure  and  usu 
wealth  and  the  relations  and  conditions  growing  out  of 


6  The  Nature  of  the  Problems 

these  efforts,  includes  the  important  field  of  industrial 
relations.  Labor  problems  arise  out  of  economic  activities 
connected  with  the  production,  exchange,  and  distribution 
of  wealth.  Sociology  deals  with  human  association  and 
the  problems  developing  from  associational  life.  In  its 
applied  aspects,  sociology  deals  with  the  phenomena  of 
crime,  poverty,  dependency,  delinquency,  and  other  prob- 
lems that  arise  in  part  out  of  the  economic  uncertainty 
which  characterizes  the  status  of  the  wage-earners.  In 
tracing  the  development  of  labor  organizations  and  pro- 
tective labor  legislation,  the  student  of  labor  problems 
is  aided  materially  by  the  historian.  Politics  and  law, 
which  deal  with  the  structure  and  functions  of  political 
life,  are  related  directly  to  a  study  of  industrial  problems. 
The  social  will,  expressed  through  law,  regulates  social 
institutions  and  economic  practices.  Thus  we  have  pro- 
tective labor  legislation  governing  hours,  wages,  condi- 
tions of  employment,  employers'  liability,  and  other 
phases  of  industrial  relationships.  Ethics,  or  the  science 
of  human  conduct,  cannot  be  dissociated  from  a  con- 
sideration of  industrial  problems.  The  student  of  labor 
problems  is  interested  primarily  in  conditions  as  they 
exist  in  industry  rather  than  in  conditions  as  they  should 
be,  but  his  efforts  in  this  regard  would  possess  little  merit 
if  he  did  not  draw  conclusions  from  the  data  analyzed 
and  venture  an  opinion  concerning  conditions  as  they 
should  be.  That  is,  he  should  be  concerned  not  only  with 
what  is  but  also  with  what  ought  to  be.  More  and  more 
we  are  learning  to  appreciate  the  psychological  and 
physiological  factors  in  production.  The  human  element 
in  industry  has  received  increasing  attention  in  recent 
years  on  account  of  the  contributions  of  the  science  of 
psychology.  It  is  not  sufficient  to  understand  the  tech- 
nical processes  of  production;  physical  and  mental  effort 
is  fundamental  to  production,  therefore  it  is  necessary  to 
understand  the  instincts,  impulses,  and  aspirations  that 
motivate  the  men  who  toil. 

Methods  of  Study. — The  methods  of  scientific  investiga- 
tion are  deductive,  inductive,  statistical,  and  historical. 


The  Nature  of  the  Problems  7 

The  deductive,  or  a  priori,  method  consists  in  reasoning 
from  general  propositions  to  particular  applications.  Gen- 
eral, legal,  economic,  and  ethical  principles  are  important 
determinants  of  opinion  regarding  freedom  of  contract, 
wages,  standards  of  living,  efficiency,  and  other  problems 
involved  in  labor.  The  use  of  deduction  in  the  field  of 
labor  problems  often  leads  to  hasty  generalizations  and 
should  not  be  used  widely.  The  inductive,  or  a  posteriori, 
method,  consists  in  building  up  general  conclusions  from 
particular  information.  Observation  of  facts  and  experi- 
ences is  the  method  of  procedure  and  furnishes  the  basis 
for  conclusions.  Valuable  use  of  this  method  is  made  in 
studying  industrial  relations.  The  statistical  method  is  the 
application  of  induction  in  the  field  of  quantitative  data. 
The  collection,  tabulation,  and  correlation  of  statistics 
constitute  one  of  the  most  important  methods  of  studying 
the  problems  of  labor.  The  United  States  Bureau  of 
Labor  Statistics  and  the  statistical  departments  of  the 
various  state  industrial  commissions  and  bureaus  of  labor 
are  performing  a  very  constructive  service  in  the  use  of 
this  method.  The  historical  method  .consists  in  recording 
and  analyzing  the  facts  and  experiences  of  the  past,  from 
which  certain  conclusions  are  drawn  concerning  contem- 
porary and  future  developments. 

Outline  of  the  Present  Study. — The  remainder  of  Part  I 
of  this  study  is  a  discussion  of  the  development  of  labor 
problems.  Part  II  is  an  analysis  of  these  problems,  in- 
cluding the  standard  of  living,  wages,  wage  theories,  the 
working-day,  child  labor,  women  in  industry,  human 
waste  in  industry,  unemployment  and  the  labor  market, 
labor  turnover,  immigration,  and  industrial  unrest.  In 
Part  III  the  agencies  and  methods  of  readjustment 
are  discussed,  including  labor  organizations,  employers' 
associations,  adjustment  of  industrial  disputes,  industrial 
government,  personnel  administration,  industrial  educa- 
tion and  training,  profit-sharing  and  labor  copartnership, 
cooperation,  socialism,  labor  legislation,  and  social  in- 
surance. The  final  chapter  embodies  a  conception  of  the 
basis  of  improvement  in  industrial  relations. 


The  Nature  of  the  Probkm9 


SELECTED  REFERENCES 

ADAMS,   T.   g.,  AND   SUMUER,   H.   L.,  Labor  Problems,  1905, 

Chap.  I. 

BAKER,  R.  S.,  The  New  Industrial  Unrest,  1920,  Chaps.  I  and  II. 
BROOKS,  J.  G.,  The  Social  Unrest,  1903,  Chap.  IV. 
COMMONS,  J.  R.,  Industrial  Goodwill,  1919,  Chap.  I. 
FRANKER,  L.  K,,  AND  FLEISHER,  ALEXANDER,  The  Human  Factor 

in  Industry,  1920,  Chap.  I, 

GOMPERS,  SAMUEL,  Labor  and  the  Employer,  1920,  Chap.  I. 
HOLLANDER,  J.  H.,  (editor),  Studies  in  American  Trade  Unionism, 

1907,  Introduction. 

HOXIE,  R.  F.,  Trade  Unionism  in  the  United  States,  1917,  Chap,  I, 
KING,  W.  L.  M.,  Industry  and  Humanity,  1918,  Introduction. 
MAROT,  HELEN,  Creative  Impulse  in  Industry,  1918,  Chap.  I. 
TEAD,    ORDWAY,    Instincts    in    Industry,    1918,    Preface    and 

Chap.  XII. 


CHAPTER  H 
THE  EMERGENCE  OF  LABOR  PROBLEMS  IN  ENGLAND 

Conditions  Determining  the  Evolution  of  Industrial 
Society. — Examined  from  a  general  point  of  view,  there 
are  at  least  five  outstanding  conditions  that  have  deter- 
mined economic  evolution.  These  conditions  are:  (1)  the 
growth  of  population;  (2)  the  increasing  quantity  and 
variety  of  human  wants;  (3)  the  external  forces  of  geo- 
graphic environment;  (4)  the  hereditary  traits  of  the  hu- 
man race;  and  (5)  discovery  and  invention.  The  instinctive 
basis  of  social  and  economic  life  is  unmistakable.  Econo- 
mists of  the  English  classical  school  prophesied  serious  con- 
sequences upon  the  failure  of  economic  laws  to  force  an 
adjustment  between  man's  tendency  to  reproduce  his  kind 
and  the  capacity  of  nature  to  supply  his  basic  wants — 
food,  clothing,  and  shelter.  Malthus,  in  his  law  of  popu- 
lation, stated  that  population  tends  to  outrun  the  food 
supply  unless  certain  positive  and  preventive  checks  such 
as  war,  famine,  disease,  and  celibacy  operate  to  retard 
its  growth.  Unregulated  reproduction  has  always  been 
viewed  as  hindering  the  progress  of  the  wage-earning 
class.  Malthus,  of  course,  did  not  foresee  the  power  of 
human  genius  to  discover  and  invent  means  of  supporting 
an  increasing  population.  Human  beings  tend  not  only 
to  enhance  their  numbers,  but  also  to  develop  an  increas- 
ing quantity  and  variety  of  wants,  The  wage-earner's 
desire  for  a  progressive  standard  of  living  is  a  basic  factor 
in  industrial  conflict.  To  provide  progressive  standards 
of  living,  old  sources  of  commodities  have  to  bo  econo- 
mized or  new  ones  have  to  be  discovered.  Invention  and 
discovery  make  possible  satisfaction  of  these  increasing 
desires,  but  there  are  always  certain  insurmountable 
limitations  in  the  geographic  environment, 

9 


10      Emergence  of  Labor  Problems  in  England 

Systems  of  Labor  in  the  Evolution  of  Economic  Society. 
— Historians  sometimes  classify  the  stages  of  economic 
evolution  on  the  basis  of  man's  increasing  capacity  to 
manipulate  for  his  own  use  the  forces  of  nature.  The 
general  periods  include:  (1)  the  hunting  and  fishing,  or 
direct  appropriation  stage;  (2)  the  pastoral  stage;  (3) 
the  agricultural  stage ;  (4)  the  handicraft  stage ;  and  (5) 
the  industrial  stage.  Only  brief  treatment  of  these  several 
stages  is  necessary  here,  except  in  the  case  of  the  indus- 
trial stage  which  is  related  so  intimately  to  modern  labor 
problems.  The  changes  were  not  identical  everywhere. 

1.  In  the  hunting  and  fishing  stage  man's  wants  were 
very  limited  and  he  depended  largely  on  the  gifts  of 
nature.     There  was  no  production  and  distribution  of 
material  goods  as  we  understand  those  terms.    There  was 
very  little  division  of  labor  and  practically  no  such  thing 
as  specialization  of  tasks.    Faint  evidences  of  the  idea  of 
private  property  appeared  and  slavery  began  to  emerge. 
There  was  no  distinct  labor  class  and  consequently  no 
labor  problems  arose.     Many  of  the  menial  tasks  were 
performed  by  women.    Man  migrated  freely  to  the  sources 
of  food  supply. 

2.  In  the  pastoral  stage  man  assumed  a  more  conscious 
direction  of  his  economic  life.     His  major  activities  had 
to  do  with  the  care  of  domesticated  herds  and  flocks. 
Conflict  of  economic  interests  developed  between  neigh- 
boring tribes  on  account  of  disputed  ownership  of  pasture 
areas.    Although  private  property  was  limited,  individual 
accumulations  of  wealth  appeared  and  division  of  society 
into  rich  and  poor  evolved.     Inheritance  of  wealth  was 
regulated  by  custom.     Division  of  labor  within  the  same 
tribe  and  between  friendly  tribes  appeared,  but  there  was 
no   distinct   differentiation  between   employer   and   em- 
ployee functions.    Labor  problems  did  not  develop  under 
such  an  economic  system.     Man  was  still  characterized 
by  migratory  habits. 

3.  The  agricultural  stage  involved  greater  production 
of  wealth,  cultivation  of  the  soil,  growth  of  private  prop- 
erty, development  of  the  institution  of  slavery  followed 


Emergence  of  Labor  Problems  in  England      1 1 

later  by  serfdom,  rise  of  economically  self-sufficient  vil- 
lage communities,  and  a  wider  exchange  of  commodities. 
The  manorial  system  in  England,  the  first  form  of  indus- 
trial organization  of  which  we  have  adequate  knowledge 
from  English  history,  existed  from  before  the  Norman 
conquest  (1066)  to  the  sixteenth  century.  This  system, 
under  which  the  lord  of  the  manor  and  the  serfs  cul- 
tivated the  land  on  a  sort  of  partnership  basis,  developed 
definite  economic  classes.  Subservient  to  the  lord  by 
customary  rules  and  enjoying  certain  rights  in  the  land, 
the  serf  rendered  "week-work,"  consisting  of  two  or 
three  days  of  labor  each  week  throughout  the  year 
for  the  lord,  and  "boon-work,"  or  labor  on  the  lord's  land 
for  one  or  two  days  in  the  plowing  season  or  the  harvest 
season.  The  serf  or  villein  was  required  to  give  the  lord 
certain  gifts  and  special  services  at  specified  seasons. 
Forces  of  change  were  at  work  in  the  manorial  system 
and  there  followed  "  (a)  a  rapid  growth  in  the  number  of 
free  tenants;  (&)  the  commutation  of  customary  services 
into  fixed  payments  in  money  or  kind;  and  (c)  the  appear- 
ance of  a  class  of  agricultural  laborers  dependent  on  the 
wages  which  they  received. " 1  In  the  period  in  which  the 
manorial  system  prevailed,  slavery,  serfdom,  and  the  wage 
system  developed,  indicating  more  clearly  a  differentiation 
of  industrial  classes  and  employment  relations. 

4.  Beginning  with  the  rise  of  towns  as  the  centers  of 
handicraft  and  trade,  during  the  close  of  the  thirteenth 
century  and  extending  to  the  introduction  of  power 
machinery  in  the  latter  part  of  the  eighteenth  century, 
the  handicraft  stage  presents  many  economic  changes 
that  are  replete  with  interest  for  the  student  of  labor 
problems.  The  gild  system  in  the  towns  developed  some- 
what later  than  the  manorial  system  in  the  country. 
Entire  towns  were  converted  into  merchant  gilds  which, 
receiving  from  the  king  a  practical  monopoly  of  trade 
in  exchange  for  allegiance  and  services,  regulated 
stringently  the  buying  and  selling  of  goods,  including  the 

Miiehard  T.  Ely,  Outlines  of  Economics,  p.  38. 


12      Emergence  of  Labor  Problems  in  England 

times  and  places  of  sale,  prices,  and  fair  dealing.  As 
the  towng  grew  numerous  handicrafts  developed,  and 
within  a  century  after  the  origin  of  the  merchant  gilds 
the  artizans  of  each  craft  organized  craft  gilds  to  promote 
honest  work,  fraternal  relations,  and  the  right  of  trade 
in  their  own  products.  Night  work  was  often  prohibited, 
weights  and  measures  were  regulated,  and  adulteration 
of  products  was  forbidden.  Moreover,  the  craft  gild  de- 
termined who  should  be  admitted  into  the  craft  and 
controlled  the  methods  of  apprenticeship. 

As  the  manorial  and  gild  systems  decayed,  they  were 
superseded  by  the  domestic  system  which  developed  in 
the  sixteenth  and  seventeenth  centuries  and  continued 
a  chief  characteristic  of  English  industry  until  the  middle 
of  the  eighteenth  century.  The  domestic  system  still 
exists  on  a  limited  scale  in  England  and  other  European 
countries.  Under  the  new  system  the  workman  became 
less  independent  than  he  had  been  during  the  period 
of  the  gilds.  The  functions  of  merchant  and  workman 
were  separated,  the  latter  receiving  from  the  middleman 
the  materials  which  he  converted  into  the  finished  product. 
Under  this  system  the  home  assumed  greater  importance 
as  the  center  of  production. 

The  Black  Death,  a  frightful  epidemic  that  originated 
in  Asia  about  1346,  reached  Europe  two  years  later,  and 
in  the  winter  of  1348  spread  over  England  with  disastrous 
effects  upon  the  population.  It  has  been  estimated  that 
of  the  approximately  four  million  people  who  then  in- 
habited England,  from  one-third  to  one-half  perished 
under  the  scourge  of  the  epidemic.  "The  majority  of 
the  laboring  population  probably  died."  The  resulting 
scarcity  of  labor  coupled  with  the  extraordinary  demand 
enhanced  its  price.  Free  artizans  and  serfs  who  had  lost 
their  masters  took  advantage  of  this  favorable  labor 
market,  Attempts  were  made  by  the  government  to  force 
the  villeins  to  give  the  same  labor  return  in  exchange 
for  their  allotments  as  under  the  old  service  system.  The 
Statutes  of  Laborers  were  passed  in  1351  and  subsequent 
years,  under  the  terms  of  which  workingmen  were  ordered 


Emergence  of  Labor  Problems  in  England      13 

to  accept  work  when  it  was  offered  them  and  definite 
rates  of  wages  for  various  classes  of  labor  were  estab* 
lished.  Declarations  of  obedience  to  these  statutes  were 
required,  and  refusal  to  comply  with  them  resulted  in 
three  or  more  days  in  the  stocks  and  imprisonment.  Un- 
scrupulous  attempts  were  made  to  return  the  serfs  to 
a  bondage  from  which  they  had  claimed  freedom  and  to 
suppress  the  free  Workers.2  The  original  statute  Was  re* 
enacted  with  slight  modifications  thirteen  times  within 
the  course  of  a  century. 

The  natural  sequence  of  such  oppression  was  the  com- 
bination of  the  lower  classes  of  free  craftsmen  in  the 
towns  and  the  masterless  serfs  for  the  protection  of  their 
own  interests.  The  enormous  increase  in  the  price  of 
commodities  mado  impossible  the  acceptance  of  the  wage 
scale  that  had  prevailed  prior  to  the  plague.  The  un- 
reasonable statutes,  therefore,  were  bound  to  be  unsuc- 
cessful. The  Peasants'  Revolt  in  1381  was  a  natural 
protest  against  the  Unfair  statutes  and  the  onerous  condi- 
tions under  which  the  lives  of  the  English  masses  were 
blighted.  So  improved  were  conditions  by  the  end  of 
the  century,  that  the  succeeding  century  has  been 
described  as  the  golden  age  of  the  English  laborer. 

The  high  price  of  wool,  together  with  the  advanced 
level  of  wages,  encouraged  the  inclosure  of  lands  that 
had  been  allotted  previously  to  villeins  or  held  in  common, 
and  their  conversion  into  immense  sheep  ranches.  Under 
the  inclosuro  system  the  people  became  separated  from 
the  land.  The  numerous  economic  changes  that  were 
taking  place  were  aided  materially  by  the  centralization 
of  power  in  the  hands  of  the  national  government.  The 
exactions  of  local  government  bodies  and  trade  societies 
hindered  progress  and  were  detrimental  to  the  common 
welfare.  By  the  year  1600  the  gilds  had  lost  their 
dominant  position  in  the  industrial  and  mercantile  life 
of  England. 

National  regulation  of  industry  soon  developed.  Henry 
VII  (1485-1509),  Henry  VIII  (1509-1547),  and  Queen 

*E.  W.  Cooke-Taylor,  The  Factory  System,  p.  309. 


14      Emergence  of  Labor  Problems  in  England 

Elizabeth  (1558-1603)  substituted  national  for  local  con- 
trol. Weights  and  measures,  coinage,  labor  conditions, 
and  many  other  things  were  regulated.  The  Statute  of 
Apprentices,  enacted  in  1563,  is  of  particular  interest  here. 
This  famous  industrial  code,  which  was  really  a  reenact- 
ment  of  the  Statutes  of  Laborers,  was  in  force  for  two 
hundred  and  fifty  years,  being  repealed  in  1813.  "It 
made  labor  compulsory  and  imposed  on  the  justices  of 
the  peace  the  duty  of  meeting  in  each  locality  once  a  year 
to  establish  wages  for  each  kind  of  industry.  It  required 
a  seven  years '  apprenticeship  for  every  person  who  should 
engage  in  any  trade ;  established  a  working-day  of  twelve 
hours  in  summer  and  during  daylight  in  winter,  and  en- 
acted that  all  engagements,  except  those  for  piece  work, 
should  be  by  the  year,  with  six  months'  notice  of  a  close 
of  contract  by  either  employer  or  employee.  By  this 
statute  all  the  relations  between  master  and  journeymen 
and  the  rules  of  apprenticeship  were  regulated  by  the 
government  instead  of  by  the  individual  craft  gilds. ' ' 8 
Other  important  developments  included  the  granting  of 
monopolies;  the  Mercantile  System,  under  which  an  ex- 
cess of  exports  and  the  accumulation  of  precious  metals 
were  encouraged ;  and  the  immigration  of  foreign  artizans 
to  introduce  new  industries. 

The  Rise  of  Modern  Industrialism. — The  fifth  stage  of 
economic  evolution  is  the  rise  and  development  of  the 
modern  industrial  system.  Modern  industrialism  is  every- 
where a  product  of  the  nineteenth  century,  but  its  founda- 
tions rest  on  the  great  mechanical  inventions  of  the  eight- 
eenth century.  The  period  of  seventy  years  between 
1760  and  1830  in  English  history  brought  revolutionary 
economic  and  social  changes  pregnant  with  significance 
for  the  working  class  and  society  in  general.  The 
antiquated  methods  of  manufacture  and  transportation 
which  had  proved  adequate  for  England  under  the 
domestic  system  were  insufficient  to  meet  the  needs  of 
the  commercial  and  industrial  era  upon  which  the  nation 

•E.  P.  Cheyney,  Industrial  and  Social  History  of  England,  1901 
ed.,  p.  156. 


Emergence  of  Labor  Problems  in  England       15 

was  about  to  enter.  Inventions,  appearing  in  rapid  suc- 
cession, revolutionized  the  industrial  life  of  England. 
Kay's  flying  shuttle  (1738)  facilitated  the  weaving 
process;  Hargreaves'  "spinning  jenny"  (about  1767)  im- 
proved hand  spinning;  Arkwright's  practical  success  of 
roller  spinning  by  the  use  of  horse-power  and  later  by 
water-power  was  completed  by  1771;  Crompton's  com- 
bination of  these  two  latter  improvements  was  finished 
in  1779;  and  Cartwright's  perfection  of  the  power  loom 
was  nearing  completion  in  the  year  1784.  Transportation 
facilities  were  improved  by  better  roads;  the  building  of 
canals,  especially  between  1790  and  1805;  and  the  devel- 
opment of  steam  locomotion.  James  Watt's  improve 
ments  in  the  steam  engine  (1769  and  1782)  aided  mining 
and  manufacturing  industries,  and  the  invention  of  the 
locomotive  by  Robert  Stephenson  in  1814  made  possible 
the  application  of  steam  power  to  land  transportation. 
In  1825  the  first  English  railroad  was  opened  for  traffic. 
These  various  developments  placed  England  at  the  front 
of  all  industrial  nations. 

The  Effects  of  the  Industrial  Revolution. — The  fore- 
going inventions  brought  about  what  is  commonly  called 
the  Industrial  Revolution  in  England.  Significant  changes 
resulted. 

1.  The   Factory   System. — Although   not   completely   a 
product  of  the  new  inventions,  the  factory  system  de- 
veloped with  unprecedented  rapidity  following  the  intro- 
duction of  technical  improvements.  The  industrial  system 
of  the  nineteenth  century  implies  a  subordination  of  the 
worker  to  the  machine  and,  as  an  English  writer  suggests, 
the  emphasis  of  modern  industrialism  is  upon  the  factory 
and  the  application  of  power  machinery  to  factory  opera- 
tion.4   The  application  of  artificial  mechanical  power,  the 
use  of  larger  accumulations  of  capital,  and  the  collection 
of  scattered  laborers  into  centralized  and  strictly  regu- 
lated establishments  are  elements  in  the  factory  system. 

2.  The  New  Position  of  Capital  and  Labor. — Labor  has 
passed  from  custom  to  status,  from  status  to  contract, 

•D.  H.  Macgrcgor,  The  Evolution  of  Industry,  p.  40. 


1 6      Emergence  of  Labor  Problems  in  England 

and  finally  to  free  industry.  In  a  state  of  slavery  the 
laborer  had  received  no  wages  for  his  efforts ;  the  worker 
was  property,  and  even  those  who  were  not  slaves  were 
bound  by  ties  of  customary  or  legal  obligation.  The 
distinctive  characteristic  of  the  new  industrialism  was 
the  payment  of  wages  and  freedom  from  personal  ties 
or  mutual  obligations  between  the  worker  and  his  em- 
ployer. The  worker  was  separated  from  the  ownership 
and  control  of  the  machinery  of  production  which  he  was 
able  to  acquire  under  the  domestic  system.  Conditions 
of  employment,  wages,  and  hours  of  work  were  now  con- 
trolled by  the  employer,  and  the  worker  was  subordinated 
to  rigid  discipline*  Increasing  use  of  machinery  intro- 
duced severe  competition  among  the  workers,  since  many 
of  them  were  displaced  by  mechanical  devices.  The 
breach  between  employer  and  workman  was  widened* 
"The  new  class  of  great  capitalist-employers  made 
enormous  fortunes,  they  took  little  or  no  part  personally 
in  the  work  of  their  factories,  their  hundreds  of  workmen 
were  individually  unknown  to  them;  and,  as  a  conse- 
quence, the  old  relations  between  masters  and  men  dis- 
appeared, and  a  new  'cash  nexus'  was  substituted  for 
the  human  tie. ' ' 8  From  the  standpoint  of  the  wage- 
earning  classes  the  most  significant  effect  of  the  Indus- 
trial Revolution  is  this:  The  major  portion  of  workers 
do  not  possess  the  opportunity  to  accumulate  the  large 
sum  of  capital  necessary  to  organize  and  operate  modern 
industrial  and  business  establishments.  The  majority  of 
the  population,  therefore,  is  relegated  to  the  permanent, 
subordinate  status  of  a  wage-earning  class.  Distinct 
economic  classes  of  capitalists,  entrepreneurs,  and  wage- 
earners  arise,  with  interests  more  or  less  antagonistic. 

3.  The  Widening  of  Markets  and  Competition. — Several 
changes  may  be  noted  with  regard  to  the  effects  of  the 
new  industrial  system  upon  both  commodity  and  labor 
markets,  (a)  Increased  production  made  possible  by  new 
industrial  processes  forced  the  expansion  of  commodity 
markets  beyond  the  limits  of  locality.  The  area  of  buying, 

•Arnold  Toynbee,  The  Industrial  Revolutiont  p.  73, 


Emergence  of  Labor  Problems  in  England      17 

which  was  localized  in  the  preceding  centuries,  became  na- 
tional and  international.  (6)  Transportation  and  com- 
munication linked  up  world  markets  and  brought  the  capi- 
talist-employer producers  of  the  various  countries  into  keen 
competition,  (c)  Consumption  now  became  commensurate 
with  the  known  world,  with  the  result  that  determination 
of  demand  for  commodities  became  extremely  difficult,  and 
overproduction  in  relation  to  purchasing  power  became 
common.  Industrial  crises  and  financial  panics  appeared 
as  disturbing  phenomena  in  economic  life,  bringing  with 
them  periods  of  general  unemployment  and  suffering  to 
the  wage-earners.  Economic  certainty  was  superseded  by 
economic  uncertainty,  for  both  capital  and  labor,  (d) 
Transportation  and  communication  connected  also  the  labor 
markets  of  the  world,  thus  bringing  into  competition  the 
workers  of  many  lands.  Seas  were  no  longer  barriers. 
New  countries,  as  America,  were  now  able  to  secure  their 
labor  supply  from  every  nation,  a  condition  that  influ- 
enced greatly  the  status  of  wage-earners  already  in  the 
industries  of  the  new  lands. 

4.  Division  of  Labor. — The  new  industrial  system  made 
imperative  a  transition  from  simple  to  complex  division 
of  labor.    Under  the  domestic  system  each  workman  per- 
formed all  of  the  processes  connected  with  the  manufac- 
ture of  a  commodity.    The  intricate  machine  methods  of 
the  factory  system  led  to  increasing  specialization  of  tasks, 
with  the  result  that  the  worker  was  less  able  to  see  the 
relation  of  his  particular  job  to  the  finished  product.    The 
subordination  of  the  worker  to  the  machine,  coupled  with 
narrow  specialization,  balked  the  fundamental  instinct  of 
workmanship  and  self-expression. 

5.  Revival  of  an  Old  Land  Policy. — The  economic  changes 
incident  to  the  Industrial  Revolution  were  as  significant 
with  regard  to  the  occupation  and  use  of  land  as  they 
were  in  the  field  of  manufacture.  Diversification  of  crops, 
general  improvement  in  agricultural  methods,  wider  ap- 
plication of  capital  to  agriculture,  enlarged  areas  of  cul- 
tivation, and  increased  production  characterize  the  new 
agriculture.    Farm  ownership  became  more  difficult,  small 


18      Emergence  of  Labor  Problems  in  England 

holdings  were  soon  absorbed  by  those  who  already  pos- 
sessed large  tracts,  and  the  agricultural  laborers  became 
a  permanent  class  of  wage-earners. 

6.  Decay  of  Domestic  Manufacture. — The  invention  of 
machinery  not  only  created  a  new  industry  but  destroyed 
the  old.    Hand  labor  could  not  compete  successfully  with 
the  machine.     Rural  domestic  manufacturers  were  de- 
voting themselves  to  inferior  forms  of  production  which 
were  bound  to  vanish  as  cheaper  and  better  methods  were 
introduced  by  factory  operators.     Those  who  had  tried 
to  resist  the  new  methods  soon  found  the  attempt  futile 
and  dropped  gradually  into  the  ranks  of  factory  and 
agricultural  laborers. 

7.  The  Wage  System. — The  separation  of  employer  and 
employee  functions  and  the  rise  of  the  modern  wage  sys- 
tem were  among  the  most  far-reaching  effects  of  the  new 
industrialism.     The  worker  practically  lost  that  liberty 
of    choice    which    hitherto    "constituted    his    safeguard 
against  the  usurpations  of  capital,  and  henceforth  he  has 
no  means  of  livelihood  other  than  to  sell  his  labor  to  the 
capitalist  for  the  wages  which  it  pleases  the  latter  to 
give  him."6    In  England,  Europe,  and  later  in  America 
free  land  practically  ceased  to  exist  as  a  refuge  for  the 
worker  from  the  difficulties  incident  to  industrial  life  in 
the  cities.     Moreover,  the  gulf  between  employers  and 
employees  widened.    The  worker  was  now  released  from 
all  directive  responsibility  in  the  administration  of  in- 
dustry. 

8.  The  Beginning  of  Labor  Organizations. — A  logical 
result  of  the  separation  of  employer  and  employee  in- 
terests was  the  germination  of  permanent  and  effective 
organizations  among  the  wage-earners.     Voluntary  asso- 
ciations of  workers  were  not  »ew,  since  the  medieval  gilds 
were  societies  of  men  who  worked  and  at  the  same  time 
carried  on  merchant  functions.    The  modern  trade  union, 
however,   is  primarily   an   organization   of   wage-earners. 
The  increase  in  size  of  the  business  establishment  under 
the  factory  system  brought  large  numbers  of  workers  in 

•Achille  Loria,  Economic  Foundations  of  Society,  p.  4. 


Emergence  of  Labor  Problems  in  England      19 

the  same  trade  and  industry  closely  together,  with  the 
consequence  that  an  identity  of  interests,  opposed  to  those 
of  the  employer,  was  recognized  by  them.  The  abandon- 
ment of  government  regulation  left  the  workers  free  to 
combine  for  their  own  protection.  The  strike  and  other 
methods  of  collective  bargaining  became  prominent,  and 
labor  organizations  soon  incurred  the  displeasure  of  the 
government  and  the  various  nonwage-earning  classes. 
The  new  labor  movement  found  serious  obstacles  in  the 
revival  of  old  laws  and  the  enactment  of  new  ones  pro- 
hibiting combination  of  laborers  to  increase  wages  and 
otherwise  change  their  economic  status.  A  series  of 
statutes  known  as  the  Combination  Acts  were  passed 
periodically  subsequent  to  the  sixteenth  century,  the  ob- 
ject of  which  was  to  prevent  artizans,  either  employers 
or  employees,  from  combining  to  change  the  rate  of  wages 
or  other  conditions  of  labor  established  legally  by  the 
government.  "The  last  of  the  Combination  Acts  were 
passed  in  1799  to  1800  and  were  an  undisguised  exercise 
of  the  power  of  the  employing  class  to  use  their  member- 
ship in  Parliament  to  legislate  in  their  own  interest."* 
These  measures  provided  that  all  agreements  between 
journeymen  or  other  workmen  to  secure  advances  in 
wages,  shorten  the  hours  of  labor,  prevent  the  employer 
from  engaging  whomsoever  he  might  choose,  persuade 
any  workman  not  to  labor,  or  to  refuse  to  work  with 
any  other  laborers  should  be  illegal.  Any  justice  of  the 
peace  was  empowered  to  convict  by  summary  process  and 
sentence  to  two  months'  imprisonment  any  workman  who 
entered  such  a  combination.8  The  normal  activities  of 
trade  unions  were  illegal  also  under  the  common  law, 
based  upon  the  doctrine  that  continued  attempts  to  in- 
fluence wages,  hours,  prices,  or  apprenticeship  were  con- 
spiracies in  restraint  of  trade.  Popular  opinion  was  also 
very  adverse  to  trade  unionism,  and  it  was  not  until  the 
end  of  the  first  quarter  of  the  nineteenth  century  that 
steps  were  taken  to  release  the  workers  from  these  limita- 
tions on  collective  action. 

'Cheynoy,  op.  cit.,  p.  279.  •/&«.,  pp.  279,  280. 


20      Emergence  of  Labor  Problems  in  England 

9.  Laissez-faire. — Among  the  most  prominent  effects  of 
the  Industrial  Revolution  was  the  decided  change  in  Eng- 
lish governmental  policy  regarding  the  economic  and 
social  life  of  the  people.  Freedom  became  the  mania  of 
the  new  industrial  era.  There  was  a  strong  revulsion 
against  limitation  of  action  and  government  regulation. 
Legal  restrictions,  in  so  far  as  they  controlled  buying  and 
selling  and  employment  relations,  were  viewed  as  inter- 
ferences with  natural  freedom.  Regulations  of  the  quality 
of  goods,  wage  rates,  apprenticeship  periods,  etc.,  ceased 
to  be  effective.  The  doctrine  of  laissez-faire  soon  received 
wide  acceptation.  In  his  "Inquiry  into  the  Nature  and 
Causes  of  the  Wealth  of  Nations,"  published  in  1776, 
Adam  Smith  describes  this  doctrine  as  follows:  "All  sys- 
tems either  of  preference  or  restraint  .  .  .  being  taken 
away,  the  obvious  and  simple  system  of  natural  liberty 
establishes  itself  of  its  own  accord.  Every  man,  as  long 
as  he  does  not  violate  the  laws  of  justice,  is  left  perfectly 
free  to  pursue  his  own  interests  in  his  own  way,  and  to 
bring  both  his  industry  and  capital  into  competition  with 
those  of  any  other  man  or  order  of  men."  9  The  majority 
of  the  members  of  Parliament  were  soon  converted  to  the 
necessity  and  efficacy  of  this  laissez-faire  policy.  Regula- 
tions under  the  Elizabethan  Statute  of  Apprentices  be- 
came obnoxious.  In  1811  a  select  committee  of  the  House 
of  Commons  reported  that  "no  interference  of  the  legis- 
lature with  the  freedom  of  trade,  or  with  the  perfect 
liberty  of  every  individual  to  dispose  of  his  time  and 
his  labor  in  the  way  and  on  the  terms  which  he  may  judge 
most  conducive  to  his  own  interests,  can  take  place  with- 
out violating  general  principles  of  the  first  importance  to 
the  prosperity  and  happiness  of  the  community." 

Restrictive  laws  were  soon  set  aside.  In  1813  the  en- 
forcement clause  of  the  Statute  of  Apprentices  which 
required  justices  of  the  peace  to  fix  wages  was  repealed, 
and  in  1814  the  apprenticeship  clause  of  the  same  act  was 
nullified;  in  1813  the  East  India  trade  was  freed  from 
restrictions  of  legal  monoply ;  in  1824  the  restrictive  f ea- 

•  End  of  Chap.  IX,  Book  IV. 


Emergence  of  Labor  Problems  in  England      21 

tures  of  emigration  were  abolished ;  in  1834  the  limitation 
provisions  of  the  poor  laws  were  amended;  the  repeal  of 
tariff  restrictions  upon  foreign  trade  began,  and  was  com- 
pleted in  1846.  Thus  government  regulations  of  economic 
life  which  had  been  imposed  in  the  sixteenth  and  seven- 
teenth centuries  were  practically  all  discarded. 

The  new  individualism  sanctioned  by  the  wide  accepta- 
tion of  laissez-faire  not  only  abolished  old  regulations  of 
economic  activities  but  sought  a  positive  and  constructive 
motive  that  would  improve  those  activities.  Enlightened 
self-interest  was  recognized  as  the  dominant  incentive, 
and  universal  free  competition  was  to  be  the  great  im- 
petus. Absolute  freedom  was  indispensable.  Universal 
freedom  of  competition  was  the  ideal  of  the  age.  In  seek- 
ing to  promote  his  own  interests,  it  was  contended,  man 
would  do  that  which  is  most  conducive  to  his  own  prog- 
ress and  to  the  progress  of  society.  Ever  since  its  incep- 
tion this  doctrine  of  individualism  has  constituted  a  per- 
sistent social  philosophy  that  has  had  a  dominant  influ- 
ence on  industrial  problems  and  the  attitude  of  govern- 
ment towards  economic  life. 

10.  Social  Effects. — Such  violent  transformations  in  the 
technical  organization  and  operation  of  industry  as  those 
effected  by  the  Industrial  Revolution  were  bound  to  have 
far-reaching  social  consequences.  Population  grew  rapidly 
and  was  absorbed  in  the  field  of  manufactures.  The 
population  of  England  in  1700  was  approximately  5,000,- 
000;  in  1750,  about  6,500,000;  in  1800,  about  9,000,000; 
in  1850,  about  18,000,000;  while  in  1921  the  population 
of  the  United  Kingdom  was  approximately  45,000,000. 
England  soon  led  the  world  in  commerce  and  manu-( 
factures. 

The  results  of  industrial  changes,  however,  were  not  all 
favorable.  The  transition  from  the  domestic  to  the  fac- 
tory system  made  necessary  great  readjustments  which 
involved  serious  hardships  for  the  small  producers  and 
the  wage-earners.  In  the  factories  women  and  children 
were  employed  more  extensively  and  more  persistently 
than  in  the  earlier  forms  of  industry.  Often  men  clung 


22      Emergence  of  Labor  Problems  in  England 

to  hand-work.  The  easily  operated  machines  accounted 
for  the  general  employment  of  women  and  children  in- 
stead of  men.  The  early  mills  have  been  described  as 
small,  hot,  damp,  and  unhealthful.  Conditions  under  the 
domestic  system  had  not  always  been  desirable,  but  in 
the  factories  hours  of  labor  were  more  regular,  con- 
tinuous, and  prolonged.  A  working-day  of  twelve,  thir- 
teen, or  fourteen  hours  was  not  unusual.  Wages  were 
sometimes  higher,  but  employment  was  less  regular  on 
account  of  seasonal  depressions  and  periodical  industrial 
crises.  There  was  little  opportunity  for  the  laborer  to 
rise  out  of  the  wage-earning  class.  The  rapid  growth  of 
manufacturing  towns  in  the  north  and  the  west  of  Eng- 
land caused  a  general  breakdown  in  the  old  arrangements 
for  providing  water,  drainage,  and  fresh  air.  Factory 
towns  were  often  filthy,  congested,  and  demoralizing. 
High  rents  were  a  natural  sequence  of  crowded  conditions. 

The  old  masters  and  the  working  classes  rebelled 
against  the  invasion  of  machine  industry  that  threatened 
to  deprive  them  of  their  very  subsistence.  The  machine 
robbed  them  of  the  "freer,  more  hopeful,  more  personal 
existence  that  was  the  lot  of  the  handicraft  worker.  .  .  . 
It  sapped'  or  threatened  to  sap  that  feeling  of  separate 
identity,  of  self-sufficingness,  of  pride,  that  is  the  proper 
glory  of  any  manhood.  .  .  .  They  saw  the  labor  that  they 
had  been  accustomed  to  do  with  their  hands  performed 
and  far  better  performed  by  a  passionless,  indefatigable 
machine :  a  mere  combination  of  wood  and  metal :  without 
a  heart  to  feel,  a  stomach  to  be  fed,  or  tender  ties  and 
sympathies  to  be  accounted  for.  .  .  .  The  due  fulfillment 
of  economical  laws  did  most  assuredly  involve  their 
present  destruction;  that  they  knew  and  for  the  moment 
was  all  they  cared  to  know.  Thus  gloomily,  amid  tumult, 
fear  and  suffering  was  the  modern  factory  system  in- 
troduced."10 

Conclusions. — In  the  course  of  economic  evolution  the 
status  of  the  worker  has  changed  from  slavery  to  serf- 
dom and  from  serfdom  to  freedom  of  contract.  With 

10  Cooke-Taylor,  op.  cit.,  pp.  428,  429. 


Emergence  of  Labor  Problems  in  England      23 

the  increasing  requirements  of  capital  for  the  organiza- 
tion and  operation  of  business  under  modern  industrial- 
ism, the  worker  has  been  separated  from  the  ownership 
and  direction  of  industry,  with  the  result  that  it  is  ex- 
tremely difficult  to  emerge  from  the  wage-earning  class. 
This  position  of  industrial  subordination  has  led  to  the 
recognition  of  an  identity  of  interests,  followed  by  or- 
ganization of  the  wage-earners  for  mutual  protection. 
The  emphasis  of  the  modern  factory  system  has  been 
upon  the  adjustment  of  the  worker  to  the  machine,  and 
this  has  resulted  in  serious  economic  and  social  problems. 
Self-interest  rather  than  mutual  aid  has  been  the 
dominant  motive  in  economic  life,  and  to  this  fact  the 
general  conflict  of  economic  interests  can  be  attributed. 
Industrial  selfishness,  engendered  by  the  desire  for  gain, 
has  given  rise  to  numerous  labor  problems  in  the  Old 
World. 


SELECTED  REFERENCES 

CHEYNEY,  E.  P.,  An  Introduction  to  the  Industrial  and  Social 

History  of  England,  revised  edition,  1920. 
COOKE-TAYLOR,    R.    W.,    The    Modern    Factory    Stfstem,    1891, 

Chap.  II. 
HAMMOND,  J.  L.  L.,  AND  HAMMOND,  MRS.  B.,  The  Skilled  Laborer, 

1760-1832,  1919. 
HAMMOND,  J.  L.  L.,  AND  HAMMOND,  MRS.  B.,  The  Town  Laborer, 

1760-1832,  1920. 
HAMMOND,  J.  L.  L.,  AND  HAMMOND,  MRS.  B.,  The  ViUage  Laborer, 

1760-1832,  1911. 
LECKT,  W.  E.  H.,  History  of  England  in  the  Eighteenth  Century, 

Vol.  VI,  Chap.  XXIII,  1882-1890. 

MACOREOOR,  D.  H.,  The  Evolution  of  Industry,  1912,  Chap.  I. 
McNEiLL,  G.  E.,  (editor),  The  Labor  Movement,  1887,  Chap.  I. 
TOTNBEE,  ARNOLD,  Lectures  on  the  Industrial  Revolution  of  the 

Eighteenth  Century  in  England,  1908,  Chap.  VI, 


CHAPTER  III 

THE   DEVELOPMENT   OF  LABOR   PROBLEMS   IN   THE 
UNITED   STATES 

The  Genesis  of  National  Life. — American  institutions 
go  back  to  the  Old  World,  and  they  have  been  influenced 
constantly  by  the  incoming  tide  of  humanity,  representing 
almost  every  race,  that  has  been  so  largely  responsible 
for  the  growth  of  this  country's  population,  the  develop- 
ment of  its  natural  resources,  and  its  consequent  indus- 
trial and  commercial  expansion.  For  three  centuries  after 
its  discovery  America  attracted  the  discontented,  the  op- 
pressed, the  ambitious,  and,  sometimes,  the  morally  de- 
generate of  the  Old  World.  Disintegration  of  old  social, 
political,  and  economic  institutions  in  the  mother  coun- 
tries added  an  impetus  to  the  desire  of  men  and  women 
to  improve  their  conditions  of  life. 

Fundamentally,  the  motivating  force  of  all  social  prog- 
ress is  the  instinctive  desire  of  the  human  race  to  achieve 
political,  social,  and  economic  freedom.  Liberty  thus 
becomes  the  passion  of  humanity,  that  is,  liberty  safe- 
guarded by  respect  for  the  rights  and  freedom  of  other 
members  of  society.  Religious  persecution,  political 
despotism,  and  economic  insufficiency  were  the  conditions 
in  the  Old  World  that  forced  expression  of  the  funda- 
mental desire  for  freedom  and  directed  the  tide  of  hu- 
manity westward.  While  economic  opportunity  has  al- 
ways been  a  factor  in  the  westward  migration  of  people, 
it  assumed  increasing  importance  in  the  history  of  the 
New  World.  It  was  not  merely  to  escape  the  immeas- 
urable misery  and  oppression  of  European  political,  social, 
and  economic  life  that  the  early  colonists  cut  away  from 
the  moorings  of  old  associations,  but  also  to  enlarge  their 
general  opportunities.  Improvement  in  economic  oppor- 

24 


Development  of  Labor  Problems  in  United  States     25 

tunity  has  been  a  traditional  ambition  of  the  restless, 
progressive  inhabitants  of  this  country,  and  it  plays  a  sig- 
nificant part  in  the  serious  problems  that  develop  in  the 
industrial  system,  particularly  in  industrial  relations. 

Historic  Ideals. — From  what  has  been  suggested  con- 
cerning the  motives  and  conditions  that  led  to  the  migra- 
tion of  peoples  to  America,  it  is  little  wonder  that  in  the 
days  of  our  national  beginnings  our  people  acquired  a 
tenacious  conception  of  the  desired  ideals  of  liberty, 
private  property,  equality  and  other  so-called  basic  nat- 
ural rights  of  man.  Moreover,  in  the  new  country  the 
colonists  lived  in  comparative  isolation  and  enjoyed  al- 
most absolute  industrial  independence ;  land  was  free  and 
abundant  in  the  early  period  of  national  life  and  for 
some  time  afterwards  could  be  acquired  on  comparatively 
easy  terms;  the  general  similarity  in  economic  conditions 
and  circumstances  precluded  the  immediate  rise  of  social 
inequality  and  made  possible  the  idealization  of  social 
equality;  the  methods  of  acquiring  property  were  mani- 
festly just,  and  the  sacredness  of  private  property  became 
an  established  fact.  It  was  thus  quite  logical  that  the 
historic  ideals  of  our  people  should  have  comprised  the 
unqualified  possession  and  enjoyment  of  life,  liberty,  prop- 
erty, and  equality.  This  conception  of  human  life  was 
the  child  of  (1)  an  environment  of  primitive  freedom 
abounding  in  opportunity  and  (2)  the  instinctive  desire 
of  man  for  liberty.  This  intense  philosophy  of  individual- 
ism has  influenced  greatly  our  industrial  development, 
including  the  position  of  labor  in  the  industrial  and  social 
system. 

Industry  and  Labor  in  the  Colonial  Period. — In  all  the 
American  colonies  agriculture  was  the  basic  industry. 
Moreover,  cultivation  of  the  soil  determined  and  directed 
manufacture  and  commercial  enterprise.  Commerce  and 
fishing  were  possible  in  New  York  and  New  England  but 
here,  as  elsewhere,  agriculture  was  the  prevailing  indus- 
try. This  was  due  to  the  geographic  environment.  Since 
the  soil  was  fertile  and  land  abundant  and  practically 
free,  the  pioneer  could  readily  undertake  his  own  enter- 


26     Development  of  Labor  Problems  in  United  States 

prise  although  he  possessed  no  capital.  As  the  land  was 
cleared  and  the  growth  of  crops  assured,  the  colonial 
farmer,  during  the  seventeenth  and  eighteenth  centuries, 
almost  achieved  an  economic  self-sufficiency.  His  food, 
his  shelter,  and  his  clothing  he  was  able  to  produce,  and 
some  things  which  he  desired  but  did  not  produce,  such 
as  salt,  sugar,  tea,  coffee,  and  iron  implements,  he  could 
acquire  in  exchange  for  his  own  surplus  commodities. 
The  large-scale  agricultural  production  of  the  South 
necessitated  considerable  capital,  and  so  was  assumed  by 
a  wealthier  group  of  landowners.  Even  here,  however, 
it  was  not  impossible  for  the  small  farmer  to  secure  a 
comfortable  living. 

The  economic  life  of  the  colonies  was  quite  simple, 
characterized  mainly  by  the  extractive  industries;  agri- 
culture, lumbering,  shipbuilding,  trading,  and  fishing 
were  the  chief  occupations.  In  the  homes  were  produced 
such  essential  articles  as  soap,  candles,  leather,  cloth,  and 
hats;  carpentry  and  blacksmithing  also  were  carried  on 
here.  Outside  of  the  home  there  was  little  production 
of  commodities  for  the  market  or  for  export.  Although 
colonial  governments  encouraged  the  development  of 
manufacturing  by  granting  bounties  or  similar  legisla- 
tion, the  scarcity  of  labor,  lack  of  capital,  and  limited 
conditions  of  pioneer  life  precluded  such  development. 
Gradually,  however,  extradomestic  manufacturing  was 
established,  and  many  of  the  goods  thus  produced  were 
exported  to  the  West  Indies  and  to  England. 

Sufficient  has  been  said  about  early  colonial  industrial 
life  to  enable  us  to  understand  and  appreciate  the  systems 
of  labor  that  were  introduced.  With  limited  opportuni- 
ties for  employment,  with  long  hours  and  heavy  tasks, 
his  freedom  of  migration  restricted  to  his  native  parish, 
his  wages  fixed  and  the  prices  of  commodities  regulated 
by  the  justice  of  the  peace,  the  status  of  the  workingman 
of  the  Old  World  was  far  from  satisfactory.  In  the 
American  colonies  labor  was  scarce.  In  the  North  the 
small  farms  were  cultivated  by  the  landowner's  family, 
and  only  occasionally  was  help  employed  on  a  wage  basis. 


Development  of  Labor  Problems  in  United  States     27 

The  extensive  plantations  in  the  South,  however,  made 
additional  laborers  an  imperative  need.  Expanding  agri- 
cultural and  manufacturing  enterprises  soon  made  neces- 
sary the  adoption  of  divers  systems  of  labor  to  meet  the 
demand.  Coming  to  the  colonies  without  sufficient  capital 
or  initiative  to  undertake  their  own  enterprises,  many 
immigrants  hired  themselves  out  as  free  laborers.  As 
a  rule,  however,  immigrants  availed  themselves  of  the 
economic  opportunities  growing  out  of  the  existence  of 
an  abundance  of  free  land.  Consequently,  there  was  a 
constant  and  rapid  shifting  of  hired  labor  into  the  ranks 
of  the  landed  proprietor  class.  On  account  of  the  diver- 
sity of  industry  and  the  practical  absence  of  slavery 
in  that  region,  New  England  possessed  the  majority  of 
free  laborers.  The  scarcity  of  labor  made  it  necessary 
for  the  colonists  to  introduce  a  system  of  mutual  labor 
exchange,  such  as  obtains  to-day  in  the  new  agricultural 
districts  of  the  American  Northwest.  Moreover,  laws 
provided  for  the  impressment  of  labor,  mechanics  and 
artizans  in  New  England  being  compelled  to  leave  their 
respective  crafts  in  order  to  aid  in  harvesting  crops. 

Indentured  Servants. — Notwithstanding  the  ideals  of 
liberty  and  equality  with  which  the  colonists  were  in- 
spired, the  existence  of  an  abundance  of  fertile  land  made 
necessary  a  larger  laboring  population  and  resort  to  prac- 
tices that  limited  or  destroyed  these  ideals.  Economic  neces- 
sity made  the  colonists  interpret  very  liberally  the 
fundamental  rights  of  man  on  which  they  were  wont  to 
philosophize.  To  meet  the  increasing  demand  for  labor, 
slavery  was  introduced  early  in  the  southern  colonies, 
where  the  conditions  of  soil  and  climate  and  the  methods 
of  agriculture  made  slave  labor  profitable.  In  the  North, 
the  system  of  importing  white  servants  from  Europe 
under  contracts  (indentures)  was  resorted  to,  such  con- 
tracts requiring  the  servants  to  work  for  a  certain  num- 
ber of  years  in  return  for  their  passage  money.  Generally 
speaking,  then,  there  were  in  the  colonies  two  main  classes 
of  laborers  who  were  not  free;  namely,  slaves  and  in- 
dentured servants.  Of  the  latter  class  there  were  really 


28     Development  of  Labor  Problems  in  United  States 

two  subdivisions,  commonly  described  as  those  whose  ser- 
vitude was  voluntary  and  those  who  performed  involun- 
tary service.  Voluntary  servitude  had  its  foundation  in 
a  free  contract  with  some  individual  or  company,  often 
a  ship  company,  stipulating  service  for  a  period  of 
years  in  payment  for  the  servant's  transportation  from 
the  Old  World  to  the  New  and  his  maintenance  during 
the  period  of  service.  These  were  free  persons  who  came 
chiefly  from  the  British  Isles  and  from  Germany  to  im- 
prove their  conditions  of  life.  Many  of  these  persons 
sold  themselves  to  emigration  brokers,  planters'  agents, 
or  shipowners,  the  sale  taking  place  at  the  wharf.  The 
newspapers  of  the  period  are  filled  with  advertisements 
of  the  arrival  of  ships  with  a  list  of  "indentured 
servants."  In  the  absence  of  a  ready  sale  at  the  wharf, 
these  servants  were  chained  together  and  led  through  the 
towns  and  villages  where  they  were  offered  for  sale.1  In 
the  state  of  Maryland  there  were  "free-willers,"  a  body 
of  indentured  servants  who  emigrated  on  the  condition 
that  they  be  given  a  certain  number  of  days  in  which  to 
dispose  of  themselves  to  the  best  advantage,  at  the  end 
of  which  time,  if  no  such  voluntary  negotiation  was 
realized,  they  were  sold  in  payment  for  transportation. 
In  general,  servants  who  emigrated  prior  to  .1650  were 
bound  for  a  period  of  seven  to  ten  years,  or  longer,  but 
the  term  of  service  was  shortened  later  to  four  years. 

As  the  raising  of  cotton  and  tobacco  and  some  other 
staple  crops  became  more  profitable,  and  the  demand  for 
workers  became  so  great  that  it  was  impossible  to  keep 
the  workers  on  a  low  wage  level,  a  regular  trade  in 
stealing  persons  for  colonial  servitude  sprang  up  in  Eng- 
land. Children  and  adults  were  enticed  or  forced  upon 
vessels  in  the  harbor  and  sold  to  shipowners  or  merchants 
about  to  depart  for  the  colonies.  Under  this  practice 
frauds  became  so  common  that  in  1664  the  Committee 
for  Foreign  Plantations  interfered,  and  a  committee  was 
appointed  to  register  the  names  and  ages  of  those  persons 
who  desired  to  emigrate  to  America.  The  attempt  to 

1A,  M.  Simons,  Social  Forces  in  American  History,  p.  19. 


Development  of  Labor  Problems  in  United  States    29 

remedy  the  evil  of  "spiriting  away"  servants  was  unsuc- 
cessful. Ten  years  after  this  measure  was  enacted  it  was 
stated  that  ten  thousand  persons  were  spirited  away  an- 
nually from  England  by  kidnappers.2 

Another  group  of  indentured  servants  consisted  mainly 
of  paupers,  criminals,  and  vagrants  who  were  dispatched 
to  the  colonies  under  royal  order  or  a  court  sentence  or, 
later,  judicial  decision  under  the  penal  statutes  of  Eng- 
land. This  system  of  sentences  was  often  a  substitute 
for  the  death  sentence,  fourteen  years  of  servitude  being 
deemed  an  adequate  substitute  for  the  death  penalty  and 
seven  years  a  substitute  for  whipping  and  branding.  The 
criminal  offenses  resulting  in  such  sentences  consisted  of 
debt,  and  political  offenses  such  as  rebellion. 

Professor  John  R.  Commons  estimates  that  probably 
one-half  of  all  the  immigrants  of  the  colonial  period 
landed  as  indentured  servants.  The  treatment  of  these 
servants  was  such  that  laws  were  enacted  to  secure  their 
protection  from  cruel  taskmasters.  Considered  economic- 
ally, the  system  of  indentured  service  was  advantageous, 
since  it  provided  a  much-needed  labor  supply  and  made 
possible  the  organization  of  labor  forces  under  intelligent 
administration  for  specific  purposes  and  for  definite 
periods.  Considered  ethically,  no  advantages  accrued. 
In  fact  the  converse  was  true,  the  immorality  of  women 
servants  and  the  system  of  kidnapping  and  selling  young 
boys  being  sufficient  evidence  of  the  demoralizing  influ- 
ence of  the  entire  system.  Side  by  side  with  the  inden- 
tured service  was  the  wage  system,  under  which  the 
workers  enjoyed  freedom  of  migration.  When  voluntary, 
immigration  furnished  an  adequate  supply  of  labor,  the 
system  of  indentures  disappeared. 

Slave  Labor. — The  introduction  of  slavery  had  far- 
reaching  effects  upon  the  economic  life  and  the  social 
stratification  of  America.  The  colonies  furnished  a  new 
and  profitable  market  for  the  sale  of  human  beings. 

1  E.  L.  Bogart,  Economic  Hittory  of  the  United  State*,  pp.  67,  68. 
The  author  wishes  to  express  big  indebtedness  to  this  work  in  the 
preparation  of  the  present  chapter. 


30     Development  of  Labor  Problems  in  United  States 

Economic  necessity  made  slavery  an  accepted  system  of 
labor.  In  the  early  years  the  supply  of  slaves  was  fur- 
nished by  the  Royal  African  Company  of  England,  but 
following  the  year  1688,  when  the  slave  trade  was  thrown 
open,  many  New  England  merchants  engaged  in  the 
traffic. 

Antagonism  to  traffic  in  slaves  disappeared  as  the 
profitableness  of  the  enterprise  became  apparent.  During 
the  eighteenth  century  the  famous  three-cornered  trade 
was  developed  by  New  England,  in  which  molasses 
brought  from  the  West  Indies  to  New  England  was  manu- 
factured into  rum  and  shipped  to  Africa  where  it  was  ex- 
changed for  slaves  who  in  turn  were  transported  to  the 
West  Indies  or  the  southern  colonies.  The  extensive  ap- 
plication of  slave  labor  to  the  production  of  cotton 
discouraged  manual  work  by  white  persons  and  so 
diminished  the  available  supply  of  free  labor.  In  the 
South,  therefore,  slavery  became  the  prevailing  system 
of  labor.  As  cotton  culture  spread  the  demand  for  slave 
labor  increased  and,  in  spite  of  prohibitory  statutes,  an 
illicit  trade  developed.  In  December,  1803,  the  state  of 
South  Carolina,  influenced  by  the  profitableness  of  the 
traffic,  gave  legal  sanction  to  the  slave  trade,  and  Charles- 
ton became  the  premier  market  for  slaves  in  the  United 
States.  This  system  of  labor  continued  until  the  slaves 
were  freed  in  1865  by  the  thirteenth  amendment  to  the 
federal  Constitution.  The  status  of  labor  under  slavery; 
was  that  of  property. 

The  Development  of  the  Factory  System. — Conditions 
incident  to  the  Revolutionary  War  stimulated  the  devel- 
opment of  domestic  manufacturing,  especially  of  textiles, 
iron,  and  other  essential  commodities.  The  achievement 
of  political  independence  did  not  result  in  industrial  self- 
sufficiency,  and  the  dumping  of  cheap  goods  by  British 
concerns,  after  the  establishment  of  peace,  had  disastrous 
effects  upon  the  infant  industries  of  the  United  States. 
The  industrial  development  of  this  country,  moreover, 
was  retarded  by  the  British  monopoly  of  manufacturing 
machinery  and  her  refusal  to  permit  the  exportation  of 


Development  of  Labor  Problems  in  United  States     31 

it.  The  secrets  of  the  new  inventions  were  guarded  jeal- 
ously, but  American  manufacturers  secured  the  necessary 
information  and  invented  their  own  machines.  The  first 
cotton  factory  in  the  United  States  was  established  at 
Beverly,  Massachusetts,  in  1787.  Other  factories  were 
soon  established  in  Rhode  Island,  New  York,  and  Penn- 
sylvania, but  the  development  of  American  manufactures 
was  rather  insignificant  until  1789,  when  the  realization 
of  a  centralized  government  made  possible  protection  of 
our  infant  industries.  In  the  same  year,  at  Pawtucket, 
Ehode  Island,  Samuel  Slater  established  a  factory  with 
complete  cotton-making  machinery,  the  details  of  which 
he  had  carried  in  his  memory  from  England. 

In  spite  of  these  early  developments,  American  manu- 
facturing was  still  confined  largely  to  the  household,  the 
factories  being  small  and  often  short-lived.  Several  con- 
ditions explain  the  tardy  development  of  industries. 
Foreign  competition  forced  upon  our  markets  cheaper 
goods  than  could  be  furnished  by  domestic  producers, 
Europe  needed  our  agricultural  products  rather  than 
manufactured  commodities,  land  was  abundant  and  free, 
the  wages  of  labor  were  high  on  account  of  scarcity,  capital 
was  extremely  limited,  and  the  profits  accruing  from  agricul- 
ture and  commerce  were  attractive  on  account  of  the 
continental  wars.  In  1804  there  were  only  four  cotton 
factories  in  the  United  States.  In  the  immediate  future, 
however,  manufacturing  was  to  assume  a  more  important 
position.  The  status  of  the  American  wage-earner  at  this 
time  was  not  favorable;  long  hours,  low  wages,  limita- 
tion of  intellectual  and  social  life,  irregular  payment  of 
wages,  harsh  laws  of  indebtedness,  the  lack  of  power  to 
secure  by  a  lien  wages  due  him,  and  the  absence  of  political 
power  were  among  the  conditions  that  made  his  lot  not 
an  enviable  one.  The  absence  of  permanent  and  effective 
labor  organizations  precluded  any  efforts  on  the  part  of 
the  workers  to  secure  favorable  legislation.  The  prev- 
alent industrial  individualism  was  opposed  to  any  form 
of  combination. 

Subsequent  to  the  year  1808  the  United  States  was 


32    Development  of  Labor  Problems  in  United  States 

destined  to  achieve  more  and  more  its  ideal  of  economic 
independence  and  industrial  self-sufficiency.  Thrown 
upon  its  own  resources  by  the  passage  of  the  Embargo 
Act  (1807),  the  Non-Intercourse  Act  (1809),  and  the  out- 
break of  the  War  of  1812,  the  youthful  nation  applied 
itself  intensively  to  the  development  of  domestic  produc- 
tion of  commodities  which  had  been  imported  previously. 
The  persistent  demands  for  protective  duties,  immediate 
exploitation  of  natural  resources,  distribution  of  public 
lands,  and  internal  improvements  were  major  factors  in 
hastening  what  proved  to  be  America's  Industrial  Revolu- 
tion. Manufacturing  grew  apace,  and  the  factory  system 
proper  was  introduced.  Production  of  commodities  was 
now  carried  on  in  response  to  a  general  and  continually 
widening  market,  and  the  laborers  were  paid  a  definite 
wage  for  a  working-day  of  specified  length.  With  the 
introduction  of  the  power  loom  the  manufacture  of 
woolen  and  cotton  goods  was  transferred  'rapidly  from 
the  household  to  the  mill,  but  even  down  to  1830  domestic 
and  neighborhood  systems  of  production  prevailed  in 
these  and  other  industries. 

By  1840  the  nation  was  passing  speedily  from  the  era 
of  the  small  factory  to  the  stage  of  larger  industrial 
organization  and  operation.  Among  the  forces  contribut- 
ing to  industrial  expansion  were  the  growth  of  popula- 
tion, the  increase  in  immigration,  the  development  of 
internal  transportation  facilities,  the  repeal  of  the  Eng- 
lish corn  laws,  the  discovery  of  gold  in  California,  and 
the  settlement  of  western  lands.  Urban  population  in- 
creased from  8.5  per  cent  of  the  total  in  1840  to  12.5 
per  cent  in  1850.  So  general  was  the  prosperity  of  the 
nation  during  the  first  sixty  years  of  the  nineteenth  cen- 
tury that  this  period  has  been  called  the  golden  age.  It 
was  not  without  its  adversities  for  the  workers,  however, 
since  the  depressions  of  1837  and  1857  brought  the  usual 
problems  of  business  recessions.  The  system  of  free  labor 
did  not  change  very  rapidly  during  the  first  decades  of 
the  century.  Masters,  journeymen,  and  apprentices 
worked  side  by  side  without  conspicuous  distinctions  as 


Development  of  Labor  Problems  in  United  States    33 

to  industrial  status.  The  division  of  labor  and  the  methods 
of  production  were  simple,  and  the  intimacy  that  char- 
acterized industrial  relations  prevented  the  rise  of  general 
labor  unrest. 

Following  1820,  however,  important  industrial  changes 
took  place.  Wider  markets,  the  extension  of  waterways, 
highways,  and  railroads,  the  provision  of  banking  facili- 
ties, and  other  developments  resulted  in  the  emergence 
of  a  merchant-capitalist  class  which  assumed  the  owner- 
ship and  direction  of  the  country's  wholesale  business. 
The  employer  now  sold  his  product  to  the  middleman 
rather  than  directly  to  the  consumer,  and  the  exploitation 
of  labor  became  a  common  practice.  Increasing  competi- 
tion, an  uncertain  wage  scale,  a  threatened  standard  of 
living,  prison  labor,  sweatshops,  and  other  unfavorable 
conditions  emerged  as  the  problems  of  labor.  It  was 
inevitable  that  labor  should  organize  for  protection,  and 
between  1820  and  1860  the  labor  movement  in  America 
assumed  a  more  or  less  definite  and  permanent  position. 
Industrial  action,  political  experiments,  and  communistic 
schemes  were  tried  as  methods  of  improvement. 

The  potato  famine  in  Ireland  in  1846,  the  political  up- 
heaval in  Europe  in  1848,  and  the  discovery  of  gold  in 
California  in  the  latter  year  stimulated  immigration  to 
the  United  States.  The  urbanization  movement  assumed 
greater  momentum,  and  by  1860  approximately  16  per 
cent  of  the  entire  population  lived  in  places  of  eight  thou- 
sand inhabitants  or  more.  Technical  improvements  in 
the  conditions  of  living,  the  development  of  transporta- 
tion, and  the  concentration  of  industries  in  urban  centers 
were  the  factors  responsible  for  increasing  urbanization. 
In  the  South  the  system  of  slave  labor  continued  for 
many  decades  and  was  not  abolished  until  1865.  Dur- 
ing the  period  of  the  Civil  War  numerous  labor  problems 
arose.  In  spite  of  the  unprecedented  demand  for  labor 
and  resultant  wage  increases,  the  abnormal  advance  in 
the  cost  of  living  and  competition  with  child,  woman, 
alien,  and  prison  labor  involved  serious  hardships  for  the 


34     Development  of  Labor  Problems  in  United  States 

native  male  wage-earners.  Organizations  of  labor  were 
revived. 

The  United  States  was  still  predominantly  an  agricul- 
tural country  in  1860,  and  even  as  late  as  1880  more  than 
44  per  cent  of  persons  gainfully  employed  were  engaged 
in  farming.  In  manufacturing  pursuits,  however,  there 
was  an  increasing  class  of  wage-earners,  comprising  21.8 
per  cent  of  the  total  population  in  1880,  of  whom  it  is 
estimated  that  four-fifths  were  employed  in  factories.  As 
the  factory  system  developed,  larger  numbers  of  opera- 
tives were  employed  in  a  single  establishment,  and  the 
machine  continued  its  steady  replacement  of  manual 
labor.  Out  of  these  industrial  changes  there  evolved  one 
of  the  most  significant  facts  in  the  modern  labor  situa- 
tion; namely,  the  increasing  dependence  of  the  working 
class  upon  capitalist-employers  for  the  opportunity  to 
work.  From  this  there  develops  a  second  important  fact 
in  modern  industrial  experience;  namely,  the  emergence 
of  a  sharp  line  of  social  cleavage  between  the  employing 
class  and  the  wage-earning  class.  In  brief,  the  introduc- 
tion and  development  of  the  factory  system  in  the  United 
States  had  created  a  new  set  of  conditions  similar  to  those 
which  had  appeared  earlier  in  England.  Among  these 
conditions  may  be  mentioned  increasing  employment  of 
women  and  children,  the  growth  of  industrial  unrest, 
immigration,  sweated  industries,  and  increasing  urban- 
ization. 

The  Growth  of  Manufactures  and  the  Integration  of 
Industry. — The  industrial  and  commercial  expansion  of 
the  United  States  subsequent  to  1880  placed  her  in  a 
position  of  first  importance  among  the  nations.  The  dis- 
astrous effects  of  the  panic  of  1873  stimulated  the  move- 
ment toward  industrial  consolidation.  Unrestricted  com- 
petition had  driven  into  bankruptcy  a  great  many  small 
enterprises,  and  combination  was  seized  readily  as  a 
refuge  from  receivership.  The  period  of  business  revival 
following  the  panic  of  1893  led  to  an  increasing  number 
of  experiments  in  combination,  and  introduced  an  era  of 
unprecedented  integration  in  business  organization.  Gen- 


Development  of  Labor  Problems  in  United  States    35 


sus  statistics  indicate  the  developments  that  took  place 
in  manufacturing. 

STATISTICS  OF  MANUFACTURES  IN  THE  UNITED  STATES,  1899-1919 


Number  of 

Total 

Value 

Year 

Establish- 

Total Capital 

Wage- 

of 

ments 

Earners 

Products 

1899 

207,514 

$8,975,256,000 

4,713,000 

$11,407,000,000 

1904 

216,180 

12,676,000,000 

5,468,000 

14,794,000,000 

1909 

268,491 

18,428,269,000 

6,615,000 

20,672,000,000 

1914 

275,791 

22,791,000,000 

7,036,000 

24,247,000,000 

1919' 

290,111 

44,776,000,000 

9,098,000 

62,428,000,000 

The  significant  facts  about  these  statistics  are  that  while 
the  number  of  establishments  and  wage-earners  increased 
about  40  per  cent  and  80  per  cent  respectively,  between 
1889  and  1919,  the  total  capital  increased  400  per  cent 
and  the  value  of  the  products  more  than  460  per  cent  in 
the  same  period.  This  indicates:  (1)  an  increase  in  the 
size  of  industrial  establishments  and  a  persistent  process 
of  industrial  integration;  and  (2)  remarkable  progress 
in  the  application  of  machines  to  production.  Judged 
according  to  capital  invested,  number  of  wage-earners 
employed,  and  the  value  of  products,  the  individual  enter- 
prise and  the  partnership  have  been  displaced  by  the 
corporation  as  the  chief  form  of  business  organization  in 
the  field  of  manufactures. 

The  tendency  towards  integration  in  industry  is  shown 
in  the  case  of  the  United  States  Steel  Corporation  and 
subsidiaries  which  had  an  average  of  about  268,000  em- 
ployees in  1920.  This  corporation  controls  various  kinds 
of  industries,  including  steel  mills,  coke  plants,  bridge 
works,  tin  plate  works,  coal  and  iron  mines,  railroads, 
steamship  lines,  docks,  and  limestone  quarries.  Its  con- 
trol is  extended  over  more  than  two  hundred  manufac- 
turing and  transportation  companies,  iron-ore  mines 


for   1010  arc   from   tho  preliminary  reports  of  the   1920 
census  and  subject  to  revision. 


36    Development  of  Labor  Problems  in  United  States 

producing  about  four-fifths  of  the  iron  mined  in  the 
United  States,  and  approximately  fifty  per  cent  of  this 
country's  coke  output.  The  capitalization  of  this  com- 
pany is  about  $1,000,000,000,  its  total  assets  are  listed 
at  about  $2,430,000,000,  and  its  capital  surplus  at  $25,- 
000,000.  In  1911,  1.5  per  cent  of  the  one  hundred  thou- 
sand stockholders  held  57  per  cent  of  the  stock,  while 
the  final  control  rested  with  a  single  private  banking 
house. 

In  1915  the  Commission  on  Industrial  Relations  stated 
that  the  control  of  manufacturing,  mining,  and  transpor- 
tation is  passing  rapidly  into  the  hands  of  great  corpora- 
tions through  stock  ownership  and  centralized  control  of 
credit  by  a  small  number  of  powerful  financial  institu* 
tions.  A  careful  study  showed  that  the  corporations  con- 
trolled by  six  financial  groups  and  affiliated  interests  em- 
ployed 2,651,684  wage-earners  and  had  a  capitalization 
of  $19,875,200,000.4  Hearings  of  the  Interstate  Commerce 
Commission  in  December,  1921,  uncovered  numerous  in- 
terlocking directorates,  prominent  financiers  having  any- 
where from  four  to  sixty-six  directorships  in  American 
railroads. 

Integration  of  industry  results  in  (1)  a  widening  of 
the  breach  between  the  owners  of  industry  and  the  wage- 
earners;  (2)  increasing  power  of  resistance  to  labor  or- 
ganizations and  their  demands  for  desirable  standards  of 
wages,  hours,  and  conditions  of  labor;  and  (3)  powerful 
influence  over  politicians  and  legislatures,  which  makes 
possible  the  defeat  of  progressive  legislation  designed  to 
aid  wage-earners  and  consumers.  In  the  giant  corpora- 
tions the  personal  relation  between  employer  and  em- 
ployee is  practically  impossible.  The  general  effect  of 
centralized  industrial  control  upon  trade  unionism  and 
labor  policies  has  been  emphasized  by  the  Commission  on 
Industrial  Relations :  ' '  Almost  without  exception  the  em- 
ployees of  the  large  corporations  are  unorganized  as  a 
result  of  the  active  and  aggressive  nonunion  policy  of  the 
corporation  managements.  Furthermore,  the  labor  policy 

4  Final  Beport,  1916,  p.  80. 


Development  of  Labor  Problems  in  United  States     37 

of  the  large  corporations  almost  invariably  determines  the 
labor  policy  of  the  entire  industry. ' ' 6 

The  Growth  of  Population.6 — The  increase  of  the  popu- 
lation of  continental  United  States  between  1790  and 
1920  is  shown  in  the  following  statistics. 

STATISTICS  OF  POPULATION  IN  THE  UNITED  STATES,  1790-1920 

Per  cent  of 
increase  over 
Year  Population  preceding  decade 

1790  3,929,214 

1800  5,308,483  35.1 

1810  7,239,881  36.4 

1820  9,638,453  33.1 

1830  12,866,020  33.5 

1840  17,069,453  32.7 

1850  23,191,876  35.9 

1860  31,443,321  35.6 

1870  38,558,371  22.G 

1880  50,155,783  30.1 

1890  62,947,714  25.5 

1900  75,994,575  20.7 

1910  91,972,266  21.0  • 

1920  105,710,620  14.9 

These  statistics  indicate  a  uniform  increase  of  about 
one-third  in  each  of  the  seven  decades  between  1790  and 
1860;  approximately  one-fourth  in  each  of  the  three  dec- 
ades between  1860  and  1890;  slightly  more  than  one-fifth 
in  each  of  the  two  decades  between  1890  and  1910;  and 
a  little  more  than  one-seventh  in  the  decade  between  1910 
and  1920.  The  numerical  increase  during  each  decade 
has  been  greater  than  that  of  the  preceding  one,  while 
the  numerical  increase  during  the  decade  1910  to  1920 
was  greater  than  that  for  any  other  ten-year  period  ex- 
cept 1900-1910.  The  net  gain  from  immigration  has  been 
an  important  factor  in  this  growth.  The  continued  de- 
cline in  the  decennial  percentage  of  increase  in  popula- 
tion since  1860  suggests  that  free  land  as  an  incentive  to 

•Ibid.,  p.  80. 

•Statistics  of  population  in  this  section  are  arranged  from  the 
Fourteenth  Census  of  the  United  States. 


38     Development  of  Labor  Problems  in  United  States 

immigration  has  diminished.  Immigrants  now  enter  our 
city  industries,  with  the  result  that  native  wage-earners 
meet  more  serious  competition  than  formerly. 

Industrial  expansion  and  increase  in  population  have 
been  accompanied  by  further  urbanization  since  1880,  as 
the  following  table  indicates. 

URBAN  AND  RURAL  POPULATION  IN  THE  UNITED  STATES,  1880-1920 


Year 

Total  Population 

Urban 
Per  Cent  of  Total 

Rural 
Per  Cent  of  Total 

1880 

50,155,783 

28.6 

71.4 

1890 

62,947,714 

35.4 

64.6 

1900 

75,994,575 

40.0 

60.0 

1910 

91,972,266 

45.8 

54.2 

1920 

105,710,620 

51.4 

48.6 

These  statistics  show  that  whereas,  in  1880,  71.4  per 
cent  of  the  population  consisted  of  rural  inhabitants,  and 
only  28.6  per  cent  of  urban  inhabitants,  in  1920  the  former 
constituted  only  48.6  per  cent  of  the  population  while 
the  latter  constituted  51.4  per  cent  of  the  total.7 

The  Influence  of  Free  Land  on  the  Problems  of  Labor. 
— Throughout  the  nineteenth  century  political  leaders 
and  social  reformers  in  the  United  States  advocated  easy 
acquisition  of  land  by  the  masses,  on  the  ground  that  the 
superior  status  of  American  wage-earners  could  be  safe- 
guarded only  in  so  far  as  they  could  take  up  free  land 
as  an  alternative  to  low  wages.  "The  great  fact  is  that 
so  long  as  cheap  lands  lasted  American  laborers  were 
insured  against  low  wages,  against  unemployment,  and 
they  had  the  equivalent  of  the  old  age  pension  in  the 
opportunity,  which  was  generally  taken,  to  secure  land 
before  the  years  of  productive  labor  were  over.  More- 
over, the  children  of  the  industrial  laborers  furnished 
constant  accessions  to  the  mass  of  independent  land- 
holding  citizens.  Employers  of  factory  labor  recognized 

7  The  Census  Bureau  classifies  as  urban  population  that  residing 
in  cities  and  other  incorporated  places  having  2,500  inhabitants  or 
more. 


Development  of  Labor  Problems  in  United  States     39 

that,  roughly,  the  wages  they  must  pay  corresponded  to 
the  productivity  of  labor  as  applied  to  the  land. ' ' 8 

Increasing  urbanization  and  increases  in  land  values 
and  farm  tenancy  indicate  that  free  land  has  practically 
ceased  to  operate  as  a  natural  regulator  of  wages.  Ac- 
cording to  figures  issued  by  the  Bureau  of  Census  the  total 
value  of  farms  in  the  United  States  in  1920  was  ap- 
proximately $68,000,000,000,  as  compared  with  about  $35,- 
000,000,000  in  1910,  representing  an  increase  of  98.8  per 
cent  for  the  decade.  The  value  of  the  average  farm 
increased  from  $5,471  in  1910  to  $10,514  in  1920.  The 
average  value  per  acre  of  land  and  buildings  was  $16.32 
in  1860,  $19.81  in  1900,  $39.60  in  1910,  and  $70.94  in  1920. 
The  increase  in  the  last  decade  was  more  than  in  the  pre- 
ceding half  century.  The  second  half  of  the  decade  1910- 
1920  was  a  period  of  inflation  which  reacted  upon  land 
values. 

Farm  ownership  is  a  status  which  is  becoming  increas- 
ingly difficult  to  acquire,  a  fact  indicated  not  only  by 
the  above  figures  on  farm  values  but  also  by  statistics 
of  farm  tenancy  issued  by  the  Census  Bureau  in  1920. 
The  problem  of  farm  tenancy  has  become  so  serious  that 
nearly  two  out  of  every  five  farms  in  the  United  States 
are  operated  by  renters  instead  of  by  owners.  Of  the 
6,448,366  farms  in  the  United  States  in  1920,  3,925,090 
were  run  by  owners,  68,530  by  managers,  and  2,454,740 
by  tenants.  Thus,  about  two-fifths  (38.1  per  cent)  of 
the  American  farmers  have  no  share  in  the  ownership  of 
the  land  they  till,  as  compared  with  about  one-fourth 
(25.6  per  cent)  in  1880.  It  is  evident,  therefore,  that 
the  passing 'of  free  land  and  the  impossibility  of  purchas- 
ing high-priced  land  practically  preclude  the  average  wage- 
earner's  escape  from  the  almost  intolerable  conditions  that 
often  exist  in  machine  industries. 

Conclusions. — The  abundance  of  relatively  free  land 
and  the  resultant  economic  opportunities  prevented  the 
early  development  of  labor  problems  in  the  United  States. 
Although  this  country  had  labor  problems  in  the  form 

•Cleveland  and  Schafer,  Democracy  in  Reconttruction,  pp.  12,  13. 


40     Development  of  Labor  Problems  in  United  States 

of  indentured  service  and  slavery,  modern  labor  problems 
are  commonly  associated  with  machine  industry  and  the 
factory  system.  The  development  of  the  factory  system 
and  the  integration  of  industry  resulted  in  a  distinct 
cleavage  between  employer  and  employee  functions  and 
gave  rise  to  well-defined  industrial  classes.  Incident  to 
industrial  expansion  are  the  problems  of  women  and  chil- 
dren in  industry,  excessive  hours  of  work,  sweatshop 
methods,  immigration,  and  other  industrial  and  social 
maladjustments. 


SELECTED  REFERENCES 

BOGART,  E.  L.,  The  Economic  History  of  the  United  States,  fourth 

edition,  1922. 
BOGART,  E.  L.,  AND  THOMPSON,  C.  M.,  Readings  in  the  Economic 

History  of  the  United  States,  1916,  Chaps.  Ill,  VII  and  XVI. 
CARLTON,   F.    T.,   History   and   Problems   of   Organized  Labor, 

revised  edition,  1920,  Chap.  III. 
CLEVELAND,  F.  A.   (editor),  Democracy  in  Reconstruction,  1919, 

Chap.  I. 
ELY,  R.  T.,  The  Labor  Movement  in  America,  1886,  Chaps.  I 

and  III. 
HILLQUIT,  MORRIS,  History  of  Socialism  in  the  United  States, 

Fifth  edition,  1910,  Chaps.  II  and  III. 
LEVASSEUR,  ^MILE,  The  American  Workman,  1900,  Preface. 
McNEiLL,  G.  E.    (editor),  The  Labor  Movement,  1887,  Chap.  V. 
MITCHELL,  JOHN,  Organized  Labor,  1903,  Chap.  VIII. 


PAET  Two 
ANALYSIS  OF  THE  PROBLEMS 

CHAPTER  IV 
THE  STANDARD  OF  LIVING 

The  Standard  of  Living. — The  term  "standard  of  liv- 
ing" may  be  defined  broadly  as  the  quantities  and 
qualities  of  food,  shelter,  clothing,  and  miscellaneous  com- 
modities and  services  which  an  individual  or  a  group  of 
individuals  deems  necessary  to  desirable  human  experi- 
ences. From  this  definition  it  will  be  readily  inferred 
that  there  obtains  no  such  thing  as  a  standard  of  living 
in  an  absolute  sense.  That  is,  there  is  no  standard  or 
measure  of  an  acceptable  basis  for  desirable  human  ex- 
periences that  is  established  universally  and  remains  un- 
changeable. On  the  contrary,  both  in  its  qualitative  and 
its  quantitative  aspects,  the  standard  of  living  is  a  variable 
thing.  Its  variable  and  elastic  character  is  seen  by  the 
fact  that  standards  of  living  differ  radically  among  dif- 
ferent races  and  nationalities,  as  well  as  among  different 
individuals  and  families  within  the  same  race  and  na- 
tionality. There  is  not  one,  but  many  standards  of  living. 

It  is  necessary  to  emphasize,  moreover,  that  the 
standard  of  living  may  vary  greatly  from  time  to  time, 
both  for  the  same  individual  and  for  groups  of  individ- 
uals ;  it  is  essentially  a  progressive  thing,  assuming  a  cumu- 
lative character  as  the  individual  or  group  acquires 
additional  tastes  and  desires.  This  cumulative  and  varied 
aspect  of  human  desires  is  of  fundamental  importance 
in  the  general  economic  and  social  progress  of  society, 
and  plays  a  significant  part  in  labor  problems  as  the 

41 


42  The  Standard  of  Living 

human  race  in  every  part  of  the  world  advances  in  civil- 
ization. For  instance,  the  wage-earner's  standard  of  liv- 
ing tends  to  become  higher  as  his  class  learns  of  and 
seeks  to  experience  the  pleasures  resulting  from  the  ac- 
quisition of  additional  want-satisfying  goods  and  services. 
Consequently,  as  a  gradually  advancing  standard  is 
adopted,  individuals  and  groups  seek  to  obtain  a  readjust- 
ment of  income  to  make  possible  the  maintenance  of  the 
new  standard.  Dissatisfaction  with  old  wage  or  salary 
levels  develops,  and  industrial  and  social  unrest  is  tho 
inevitable  outcome.  Economic  necessity  is  the  mother 
of  both  invention  and  social  unrest.  When  the  price  level 
rises  to  points  that  preclude  the  maintenance  of  accepted 
standards  of  living,  or  when  income  ceases  to  provide 
the  requirements  of  the  newly  adopted  standard,  con- 
tentment ceases  to  be  a  virtue  and  unrest  emerges  as  the 
expression  of  dissatisfaction  with  the  status  quo. 

While  the  determination  of  the  standard  of  living 
is  largely  a  personal  matter,  the  control  of  the  pre- 
vailing standard  is  only  partly  subject  to  the  jurisdiction 
of  the  individual.  In  so  far  as  he  wills  to  acquire  new 
desires  and  tastes,  the  individual  may  set  his  own  ideal 
standard.  Even  his  desires  and  tastes,  however,  are 
largely  a  social  product,  an  outgrowth  of  his  social  en- 
vironment and  an  expression  of  the  psychology  of  the 
society  of  which  he  is  an  integral  part.  Since  the  in- 
dividual  frequently  makes  no  conscious  attempt  to  effect 
a  socially  desirable  adjustment  between  expenditures  and 
income,  any  theory  that  would  absolve  the  individual 
from  all  responsibility  with  regard  to  the  standard  of 
living  would  be  ethically  wrong  and  socially  unwise.  It 
is  true,  nevertheless,  that  the  actual  quantity  and  quality 
of  material  comforts  that  constitute  the  standard  of  living 
of  any  family  are  determined  largely  by  social  forces 
over  which  the  individual  family  has  little  or  no  control. 
These  social  forces  comprise:  (1)  the  family  income,  or 
the  income  of  those  who  are  primarily  responsible  for  the 
maintenance  of  the  family,  and  (2)  the  general  level  of 


The  Standard  of  Living  43 

commodity  and  service  prices  in  terms  of  which  the  real 
income  of  the  family  must  be  measured;  that  is,  the  cost 
of  food,  shelter,  clothing,  and  "other  goods  and  services 
essential  to  its  subsistence  and  progress.  Wages  and  the 
price  level,  accordingly,  are  the  major  determinants  of 
the  standard  of  living  that  obtains  in  any  social  group 
and,  as  a  direct  consequence,  the  possibilities  of  human 
well-being  and  advancement  are  limited  and  controlled 
by  the  operation  of  external  forces.1  Through  the  exer- 
cise of  frugality  individuals  may  make  some  adjustment 
in  the  standard  of  living  in  order  to  cope  with  changing 
prices,  but  not  without  sacrificing  the  formerly  accepted 
standard.  Moreover,  it  is  possible  by  effective  organiza- 
tion and  collective  bargaining  to  secure  a  readjustment 
in  wage  scales  to  meet  the  changing  cost  of  living,  but 
price  phenomena  are  not  so  obviously  within  the  control 
of  individuals  or  groups. 

Types  of  Standards  of  Living  and  Budget  Levels. — 
Subsequent  to  the  outbreak  of  the  World  War  violent 
fluctuations  in  the  price  level  constituted  one  of  the  major 
causes  of  industrial  unrest,  and  studies  in  the  cost  of 
living  became  a  fundamental  requisite  to  wage  adjust- 
ments. Studies  in  family  budgets  of  economic  groups 
have  since  assumed  a  position  of  primary  and  permanent 
importance  in  relation  to  the  solution  of  one  of  the  most 
acute  phases  of  the  labor  problem — industrial  disputes. 
The  numerous  analyses  of  family  budgets  that  have  been 
made  distinguish  several  standards  of  living.  (1)  The 
pauper-poverty  standard  represents  roughly  a  standard 
of  living  just  above  dependency,  that  is  to  say,  a  level 
that  barely  escapes  the  necessity  of  requesting  aid  from 
charitable  institutions  and  benefit  societies  or  where  the 
alternative  is  the  accumulation  of  a  serious  burden  of  in- 
debtedness. (2)  The  minimum  of  subsistence  standard 
represents  essentially  a  mere  animal  existence  and  makes 
impossible  the  attainment  of  the  comforts  and  desirable 

'See  R.  C.  Chapin,  Thf  Standard  of  Living  Among  Workingmen'* 
Families  in  New  York  City. 


44  The  Standard  of  Living 

experiences  that  should  be  associated  with  human  beings 
in  a  progressive  society.  (3)  The  minimum  of  health  and 
comfort  standard  indicates  a  standard  somewhat  above 
mere  animal  subsistence.  This  standard  provides  not  only 
for  the  material  necessities  of  food,  shelter,  and  clothing, 
but  also  for  certain  desirable  comforts  of  life.  Among  these 
added  comforts  are  clothing  in  amounts  not  merely  suffi- 
cient to  guarantee  physical  comfort  but  to  maintain  satis- 
faction of  the  instinct  of  self-respect  and  decency;  insur- 
ance against  the  more  serious  misfortunes  such  as  death, 
disability,  and  fire ;  good  education  for  the  children  of  the 
family,  a  certain  amount  of  amusement,  and  some  expendi- 
tures for  self -development.  (4)  The  standard  of  health 
and  decency,  or  the  normal  standard,  comprises  a  more 
reasonable  degree  of  comfort,  respect,  and  human  develop- 
ment than  the  standard  of  health  and  comfort  represents. 
The  standard  of  health  and  decency,  or  normal  standard, 
was  suggested  by  the  United  States  Bureau  of  Labor 
Statistics  a  few  years  ago,  in  the  preparation  of  a  quantity 
budget  for  use  by  the  Joint  Commission  of  Congress  on 
Reclassification  of  Salaries.  The  purpose  of  this  commis- 
sion was  to  reclassify  employees  of  the  federal  govern- 
ment with  the  immediate  object  of  readjusting  their 
salaries,  which  have  been  very  inadequate.  In  determin- 
ing the  quantities  and  in  selecting  qualities  and  ascer- 
taining prices  of  commodities  and  services  that  constitute 
such  a  budget,  the  bureau  kept  in  mind  the  minimum  of 
health,  decency,  and  comfort.  Neither  the  poverty 
standard  nor  the  minimum  of  subsistence  standard  'were 
accepted  by  the  bureau  nor,  indeed,  should  such  standards 
ever  be  accepted  by  public  agencies  and  private  bodies, 
as  a  basis  for  wage  adjustments.  If  the  present  economic 
system  fails  to  guarantee  to  the  deserving  and  efficient 
hand-workers  and  brain-workers  of  every  country  an  in- 
come sufficient  to  make  possible  the  maintenance  of  a 
minimum  of  health,  decency,  and  comfort,  it  has  failed 
to  function  successfully  in  the  interest  of  social  progress. 
The  Minimum  Quantity  Standard. — Because  of  the  un- 


The  Standard  of  Living  45 

stable  character  of  the  price  level  and  the  attendant  varia- 
tions in  the  cost  of  living,  it  is  impossible  to  formulate 
a  general  and  permanent  cost  budget.  For  this  reason 
the  quantity  budget  is  of  greater  value  in  determining 
the  necessary  and  desirable  readjustments  in  the  wage 
scale  for  a  wide  area.  A  quantitative  measurement,  there- 
fore, is  the  only  one  that  can  be  given  general  application. 
With  few  exceptions,  the  items  in  the  family  budget  can  be 
expressed  quantitatively.  In  a  quantity  budget  formu- 
lated for  the  District  of  Columbia  by  the  United  States 
Bureau  of  Labor  Statistics,  in  1919,  it  was  found  that 
approximately  85  per  cent  of  the  total  cost  was  made 
up  of  items  for  which  a  definite  quantity  or  amount  had 
been  expressed.  The  quantity  budget  is  one  in  which  the 
requisites  of  food,  shelter,  clothing,  and  miscellaneous  com- 
modities and  services  for  the  maintenance  of  the  desired 
standard  of  living  are  measured  and  expressed  in  terms 
of  amounts  or  quantities,  as  contrasted  with  the  cost  budget 
which  measures  and  expresses  these  items  in  terms  of  dol- 
lars and  cents. 

Budgetary  studies  in  the  United  States  are  usually 
based  on  a  family  of  five — husband,  wife,  and  three  chil- 
dren below  the  age  of  fifteen  years — which  is  commonly 
regarded  as  the  typical  American  family.  The  average 
number  in  the  families  included  in  the  cost-of-living  study 
made  by  the  United  States  Bureau  of  Labor  Statistics  in 
1918-1919  was  4.9  persons,  or  3.33  equivalent  adult  males. 
The  average  or  typical  family  varies  with  the  different 
countries.  The  minimum  quantity  budget  requirements 
as  outlined -by  the  bureau  for  the  average  American 
family  are  worth  noting  in  detail.  These  requirements 
may  be  summarized  as  follows: 

1.  A  sufficiency  of  nourishing  food  for  the  maintenance 
of  health,  especially  the  health  of  children. 

2.  Housing  in  low-rent  neighborhoods  and  within  the 
minimum  number  of  rooms  consistent  with  decency,  guar- 
anteeing sufficient  light  and  toilet  facilities  for  the  main- 
tenance of  health  and  decency. 


46  The  Standard  of  Living 

3.  The  upkeep  of  household  equipment,  such  as  kitchen 
utensils,  bedding  and  linen,  requisite  for  the  maintenance 
of  health,  but  comprising  no  provision  for  the  purchase 
of  additional  furniture  to  guarantee  comfort. 

4.  Clothing  sufficient  for  warmth,  of  sufficiently  good 
quality  to  be  economical,  but  with  no  further  regard  for 
appearance  and  style  than  is  absolutely  required  to  allow 
the  family  members  to  appear  in  public  and  participate 
in  the  limited  activities  of  their  immediate  social  group 
without  slovenliness  or  loss  of  self-respect. 

5.  Provision  for  miscellaneous  expenditures  other  than 
those    already    enumerated,    that    would    allow    only    a 
minimum  outlay  for  such  necessary  requirements  as  the 
following:  (a)  street  car  fares  to  and  from  work  and  for 
purposes  of  shopping  and  marketing;  (b)  a  modest  amount 
of  insurance;  (c)  medical  and  dental  attention;  (d)  con- 
tributions to  churches,  labor  organizations,  or  other  benefi- 
cial associations;  (e)  limited  expenditure  for  amusements 
such  as  an  occasional  motion  picture  show  or  street  car 
ride  for  pleasure,  some  Christmas  gifts  for  the  children, 
et  cetera;  and  (/)  subscription  for  a  daily  newspaper.2 

In  the  preparation  of  a  budget  such  as  is  outlined  above 
two  steps  are  involved;  namely,  the  determination  of  the 
number  of  commodities  and  services  essential  to  mainte- 
nance of  the  proposed  standard  of  living,  and  the  deter- 
mination of  its  cost  at  the  time  and  in  the  locality  for 
which  it  is  being  prepared.  Budgetary  studies  of  this 
character  provide  a  basis  for  a  rational  and  scientific 
adjustment  in  wage  scales,  but  precautions  must  be  taken 
to  prepare  the  budget  in  accordance  with  local  conditions, 
which  will  vary  greatly. 

The  Minimum  Quantity  Standard  Not  Ideal. — In  out- 
lining a  minimum  quantity  budget  the  purpose  is  not  to 
present  an  ideal  standard,  but  rather  to  establish  a  bottom 
level  of  health  and  decency  below  which  a  family  cannot 

3  U.  S.  Bureau  of  Labor  Statistics,  Tentative  Quantity  and  Cost 
Budget,  1919,  p.  6.  For  an  itemized  statement  of  this  budget  see 
the  Monthly  Labor  Eeview,  June,  1920,  pp.  1-18. 


The  Standard  of  Living  47 

go  without  danger  of  physical  and  moral  deterioration. 
As  a  matter  of  fact  this  budget  does  not  provide  for  a 
large  number  of  comforts  which  should  be  included  in  a 
desirable  American  standard  of  living.  For  instance,  it 
makes  no  direct  provision  for  savings  other  than  a  small 
amount  of  insurance,  nor  for  such  requirements  as  vaca- 
tions, books,  and  other  commodities  and  services  of 
general  educational  value.  Such  a  budget,  however,  does 
provide  for  the  maintenance  of  the  family  in  health  and 
moderate  comfort.  It  provides  for  a  sufficiency  of  food, 
respectable  clothing,  sanitary  housing  conditions,  and  a 
minimum  of  miscellaneous  commodities  and  services  that 
should  constitute  a  part  of  every  family's  budget. 

In  speaking  of  an  ideal  standard  of  living  it  is  well 
to  keep  in  mind  that,  on  account  of  the  paucity  of  natural 
resources  or  deficiencies  in  the  basis  of  wealth  distribution, 
the  great  mass  of  humanity  has  not  yet  attained  such 
a  standard.  Many  persons  speak  of  an  American  standard 
of  living  as  though  it  were  ideal.  If  the  multiplicity  of 
investigations  of  standards  and  costs  of  living  that  have 
been  made  in  the  United  States  during  the  last  decade 
prove  anything,  they  demonstrate  conclusively  that  there 
is  no  such  thing  as  the  American  standard  of  living  in 
the  sense  of  a  superior  standard  giving  all  the  necessaries, 
many  of  the  comforts,  and  a  goodly  supply  of  the  luxuries 
of  life.  In  fact,  there  are  many  standards  of  living  in 
the  United  States.  When  he  was  United  States  Commis- 
sioner of  Labor  Statistics,  Dr.  Royal  Meeker  had  the  fol- 
lowing to  say  concerning  this  matter:  "On  the  contrary, 
we  find  that  there  are  as  many  different  standards  as 
there  are  different  incomes  and  families  of  different  sizes. 
In  the  lower  income  groups  the  living  conditions  are  hard 
indeed.  The  incomes  of  the  lower-paid  workers  must  be 
increased  and  the  cost  of  food,  clothing,  and  housing, 
must  be  lowered  to  enable  thrsc  families  to  meet  the 
higher  costs  of  subsistence.  Social  legislation  is  needed 
to  give  them  better  and  cheaper  food,  clothing,  houses, 
medical  treatment,  and  insurance.  Even  in  the  higher 


48  The  Standard  of  Living 

income  groups  conditions  are  not  so  easy  as  they  are  fre- 
quently pictured  to  us.  Let  us  not  be  fooled  by  the  cry 
that  the  American  standard  of  living  is  the  highest  in 
the  world.  Let  us  make  the  minimum  living  standard  in 
America  one  that  will  support  life  in  decency  and 
health."3 

Changing  Items  in  the  Cost  of  Living. — Price  fluctua- 
tions are  of  primary  importance  in  a  consideration  of 
the  problems  of  labor.  The  instability  of  the  price  level 
is  illustrated  by  price  movements  between  1907  and  1921. 
Since  they  do  not  buy  wholesale,  wage-earners  are  in- 
terested chiefly  in  changes  in  the  retail  price  of  the  basic 
commodities. 


INDEX  NUMBERS  OP  CHANGES  IN  THE  RETAIL  PRICES  OF  THE  PRINCIPAL 
ARTICLES  OF  FOOD  IN  THE  UNITED  STATES,  1907-1921* 

(Average  for  1913  =  100) 

All  commodities 

Year  combined 

1907  82 

1908  84 

1909  89 

1910  93 

1911  92 

1912  98 

1913  100 

1914  102 

1915  101 

1916  114 

1917  146 

1918  168 

1919  186 

1920  203 

1921  153 

The  influence  that  price  fluctuations  have  on  the  cost 
of  living  is  shown  in  the  following  table. 

*U.  S.  Bureau  of  Labor  Statistics,  Monthly  Labor  Beview,  July, 
1919,  p.  13. 

4  Ibid.,  December,  1921,  p.  37.  Twenty-two  articles  of  food  are 
included. 


The  Standard  of  Living 


49 


PERCENTAGE   DISTRIBUTION   OF   FAMILY   EXPENDITURES    B.\SKI>   ON 

$1,000  INCOME  IN  1914,  AND  INCOME  IN  1919  INCREASED  EQUALLY 

WITH  THE  ADVANCE  IN  THE  COST  OF  LIVING  * 


Item  of 
Expenditure 

DECEMBER,  1914 

Approxi- 
mate Per 
Cent  of 
Increase 
in  Cost, 
Dec.  1914 
to  Dec. 
1919 

DECEMBER,  1919 

Amount 
Expended 

Per 

Cent  of 
Total 
Expendi- 
ture 

Amount 
Necessary 
to  Expend 
to  Meet 
Increased 
Cost 

Per 

Cent  of  i 
Total 
Expendi- 
ture 

Food  

$430 
130 
180 
50 
50 
160 

43.0 
13.0 
18.0 
5.0 
5.0 
16.0 

91 
198 
25 
52 
175 
92 

$821 
387 
225 
76 
138 
307 

42.0 
19.8 
11.5 
3.9 
7.1 
15.7 

Clothing  

Rent  

Fuel  and  Light  . 
Furniture  

Miscellaneous.. 
Total  

$1,000 

100.0 

95 

$1,954 

100.0 

It  will  be  seen  from  the  above  statistics  that  in  1919 
it  took  $1,954  to  purchase  the  same  amount  of  commodi- 
ties as  could  be  purchased  in  1914  for  $1,000.  The  in- 
crease in  the  cost  of  living  between  these  two  dates  was 
approximately  95  per  cent. 

The  changing  character  of  the  minimum  of  subsistence 
budget  is  shown  in  the  experience  of  New  York  City.  In 
1907  the  minimum  of  subsistence  budget  necessitated  an 
income  of  $825;  in  1914,  $876;  and  in  1918,  $1,526.  In 
May,  1920,  evidence  before  the  United  States  Anthracite 
Coal  Commission  showed  that  on  the  basis  of  prevailing 
prices  the  cost  of  bare  subsistence  in  the  anthracite  region 
was  $1,772.54,  while  $2,242  was  deemed  necessary  to  main- 
tain an  average  family  according  to  the  minimum 
standard  of  health  and  comfort.  The  purchasing  power 
of  the  dollar,  taken  as  100  cents  in  July,  1914,  decreased 
to  48  cents  in  July,  1920,  and  in  November,  1921,  was 

•  Monthly  Labor  Review,  July,  1»20,  p.  3, 


50  The  Standard  of  Living 

about  61  cents.  Changes  in  the  cost  of  living  necessitate 
readjustments  in  wage  scales  in  order  to  maintain  the 
standard  of  life.  This  is  why  such  changes  are  accom- 
panied almost  invariably  by  industrial  unrest. 

The  Standard  of  Living  as  a  Basis  for  Wage  Adjust- 
ments.— Protection  of  the  standard  of  life  has  been  desig- 
nated as  the  fundamental  purpose  of  labor  organizations ; 
trade  union  functions  are  crystallized  in  organized  re- 
sistance to  any  changes  that  are  likely  to  result  in  the 
degradation  of  the  workers  as  a  class.*  Price  inflation 
makes  impossible  the  maintenance  of  customary  standards 
of  living,  since  in  such  periods  wages  lag  behind  prices. 
Price  deflation,  on  the  other  hand,  disturbs  standards 
of  life  acquired  in  periods  of  prosperity  after  wages  over- 
take prices;  when  prices  fall  wage-earners  are  reluctant 
to  accept  reductions  in  pay.  This  is  probably  why  Pro- 
fessor Commons  has  called  fluctuation  of  currency  the 
greatest  of  all  labor  problems. 

Consideration  of  family  budgets  as  a  basis  for  wage 
adjustments  necessitates  a  distinction  between  money  in- 
come and  real  income.  The  former  consists  of  a  person's 
income  in  terms  of  dollars  and  cents,  while  the  latter 
comprises  the  commodities  and  services  which  can  be 
procured  in  exchange  for  money  income.  Prior  to  the 
World  War  little  use  was  made  of  family  budgets  as  a 
basis  for  wage  adjustments.  In  the  period  of  the  war 
this  method  was  used  widely  by  public  and  private  agen- 
cies and  the  practice  has  been  continued.  In  Great  Britain 
numerous  agreements  have  been  made  between  organiza- 
tions of  employers  and  workpeople,  providing  for  the 
regular  and  automatic  adjustment  of  wage  rates  in  ac- 
cordance with  variations  in  the  cost  of  living.  In  Decem- 
ber, 1920,  it  was  estimated  that  1,500,000  employees  were 
covered  by  these  agreements,  while  in  August,  1921,  the 
number  was  2,750,000,  or  approximately  equal  to  40  per 
cent  of  the  trade  union  membership  of  Great  Britain. 
These  agreements  are  found  in  such  occupations  as  build- 

•  Sidney  and  Beatrice  Webb,  History  of  Trade  Unionism,  1920  ed., 
p.  20. 


The  Standard  of  Living  51 

ing  and  allied  trades,  metal  trades,  textile  trades,  railway 
service,  and  civil  service.7  The  United  States  Anthracite 
Coal  Commission  of  1920  gave  careful  consideration  to 
family  budgets  in  relation  to  wages,  and  numerous  em- 
ployers have  adopted  the  same  practice. 

The  first  step  in  a  scientific  readjustment  in  wage  scales 
is  the  determination  of  the  changes  in  prices  that  have 
taken  place  in  the  immediate  vicinity  of  the  plant;  the 
second  step  involves  an  adjustment  in  the  wage  scale 
that  will  provide  for  the  maintenance  of  the  standard  of 
life.  Regarding  such  a  policy  of  wage  adjustments  a 
corporation  which  has  applied  it  has  the  following  to  say : 
"This  means  a  careful  analysis  of  the  wage  conditions, 
due  regard  being  given  to  the  current  purchasing  power 
of  the  dollar,  and  practical  application  of  our  findings 
to  the  solution  of  our  own  problem.  We  believe  it  fair 
and  practical  to  'give  more  in  order  to  get  more,'  and 
in  the  recognition  of  the  relative  increase  in  living  cost, 
as  compared  with  the  relative  increase  in  wages  in  any 
given  period,  we  are  only  laying  the  foundation  for  better 
conditions  and  better  relations  between  men  and  manage- 
ment, which  in  turn  will  lead  to  the  ultimate  end  of 
maximum  production  from  any  given  set  of  conditions 
or  facilities ;  and  for  the  coincident  results  such  as  maxi- 
mum wages,  minimum  costs,  labor  stability,  equitable 
profits  on  capital  invested,  and  mutual  success  and  satis- 
faction to  all  concerned,  viz.,  the  worker,  the  manager, 
the  owner,  and  the  community  of  which  these  three  are 
members.  If  we  do  not  recognize  this  factor  in  our  wage 
relations  then  we  are  bound  to  pay  for  it  in  one  way  or 
another.  Briefly,  when  an  individual  finds  his  income 
does  not  permit  him  to  maintain  the  standards  of  living 
to  which  he  has  been  accustomed  (to  say  nothing  of 
reaching  higher  standards  which  human  nature  inherently 
desires  as  men  advance  in  years)  he  soon  gets  into  a  frame 
of  mind  where  he  is  torn  between  (a)  lowering  his  standards 
of  living  by  omitting  certain  articles  of  diet — making  the 

*  British  Ministry  of  Labor,  Labor  Gtuette,  Vol.  XXIX,  No.  8, 
August,   1921,  p.  390. 


52  The  Standard  of  Living 

old  suit  last  another  year,  moving  to  cheaper  quarters, 
or  practicing  other  economies  or  substitutions — and  (6) 
'  hitting  the  boss  for  a  raise. '  "  8 

This  company  obtained  information  from  its  employees 
concerning  changes  in  the  cost  of  living.  An  examination 
of  the  questionnaire  showed  that  the  same  commodities 
and  services  used  in  the  same  quantity  by  the  standard 
family  of  five  in  the  years  1913,  1915,  1917,  1918,  and 
1919  could  be  purchased  in  1913  for  $4.06  per  day  and 
in  May,  1919,  for  $7.39  per  day,  an  increase  of  81.6  per 
cent  in  the  daily  living  cost.  This  percentage  of  increase 
was  accordingly  adopted  as  the  basis  for  wage  adjust- 
ment. A  wage  advance  carrying  from  two  and  a  half  to 
eight  cents  an  hour  on  all  classes  of  labor  was  put  into 
effect. 

The  results  of  this  voluntary  adjustment  on  the  part 
of  the  management  were :  (1)  It  strengthened  the  workers7 
faith  in  the  watchfulness  of  the  management  over  the 
conditions  that  affect  their  interests,  and  demonstrated 
the  fact  that  it  is  possible  to  settle  grievances  in  an 
amicable  manner;  (2)  it  paved  the  way  for  additional 
application  of  the  principles  of  scientific  management  to 
the  operation  of  the  business ;  and  (3)  the  cost  of  increas- 
ing the  wage  scale  was  approximately  ten  per  cent  in 
its  net  effect  on  the  annual  pay-roll,  but  reduction  of 
wasted  effort  and  the  introduction  of  other  economies 
more  than  compensated  for  the  increase.  The  company 
has  decided  to  continue  this  policy  with  regard  to  wages, 
and  states  that  by  standardizing  its  methods  and  by  semi- 
annual or  quarterly  review  of  price  changes  wage  adjust- 
ments will  become  an  important  factor  in  its  business 
affairs. 

Numerous  difficulties  are  met  in  adjusting  wage  scales 
to  the  cost  of  living.  (1)  The  question  arises  as  to  what 
constitutes  a  living  wage.  There  is  no  general  agreement 
as  to  the  nature  of  such  a  wage.  In  wage  arbitrations, 
however,  there  is  growing  recognition  of  the  conception 

8  See  Bulletin  of  the  Taylor  Society  (New  York),  October,  1919, 
pp.  29-46. 


The  Standard  of  Living  53 

that  a  living  wage  is  not  merely  a  subsistence  payment, 
but  an  income  sufficient  to  provide  the  minimum  physical 
needs  of  food,  clothing,  and  shelter  and  a  reasonable 
measure  of  health,  recreation,  and  education.  Under  price 
fluctuations  this  wage  will  vary  so  that  there  can  be  no 
fixed  sum  designated  as  a  living  wage.  (2)  To  what 
extent  can  family  budgets  be  used  in  the  determination 
of  adequate  wages?  What  standards  are  to  be  accepted? 
What  type  of  family  is  to  be  considered?  All  standards 
of  life  thus  far  formulated  constitute  a  minimum  level 
below  which  income  and  expenditures  cannot  fall  without 
sacrificing  essentials,  but  above  which  they  may  rise  in 
the  interest  of  added  comfort  and  culture.  As  a  basis 
for  budgetary  studies,  the  typical  American  family  of 
five  has  been  condemned  as  not  most  representative  of 
American  wage-earners.  Since  no  more  accurate  standard 
has  been  formulated,  however,  it  is  necessary  to  use  this 
one.  (3)  The  opposition  of  organized  labor  must  be 
recognized  as  a  factor  limiting  the  use  of  the  cost  of 
living  as  a  basis  for  wage  adjustments.  The  executive 
committee  of  the  American  Federation  of  Labor,  in  a 
meeting  at  Atlantic  City,  New  Jersey,  August,  1921,  went 
on  record  as  favoring  the  abolition  of  wage  determina- 
tions solely  on  the  basis  of  the  cost  of  living.  It  was 
contended  that:  (a)  The  American  trade  union  movement 
believes  in  the  progressive  improvement  of  the  working 
class;  (6)  the  practice  of  fixing  wages  solely  on  the  basis 
of  the  cost  of  living  is  a  contravention  of  sound  economic 
theory;  (c)  the  practice  has  led  to  a  classification  of  human 
beings  and  a  standardization  of  classes,  each  group  having 
a  presumptive  right  to  a  given  quantity  of  various  com- 
modities; and  (d)  the  necessity  and  desirability  of  im- 
proving constantly  the  standard  of  life  impel  labor  to  take 
a  deep  and  intelligent  interest  in  management,  to  secure 
both  proper  direction  of  productive  effort  and  just  dis- 
tribution of  the  increasing  product  of  industry. 

The  objections  raised  by  organized  labor  against  the 
cost  of  living  as  the  only  determinant  of  wages  do  not 
imply  opposition  to  adjustments  on  the  basis  of  a  progres- 


54  The  Standard  of  Living 

sive  standard  of  living.  In  explaining  the  position  of 
the  executive  committee  Mr.  Gompers  stated : ' '  The  work- 
men need  a  wage  that  insures  something  more  than 
enough  barely  to  exist.  The  workmen  need  some  of  the 
worth  while  things  of  life ;  some  of  the  little  luxuries  and 
the  finer  things  of  life."  No  matter  what  position  may 
be  taken  with  regard  to  budgetary  studies  as  an  aid  to  wage 
adjustment,  it  will  be  necessary  always  to  ascertain 
changes  in  the  cost  of  living  in  order  to  determine  whether 
prevailing  wage  scales  are  adequate  to  provide  a  desirable 
standard  of  life.  Intelligent  investigation  may  avert  un- 
necessary industrial  strife. 

Conclusions. — The  standard  of  living  is  not  a  fixed  but 
a  variable  thing,  determined  partly  by  the  individual  but 
largely  by  social  and  economic  forces  over  which  the 
individual  exercises  little  or  no  control.  Of  the  various 
standards  proposed,  it  seems  proper  that  America  should 
adopt  the  standard  of  health,  decency,  and  comfort.  The 
quantitative  determination  of  such  a  standard  is  prac- 
ticable, while  the  cost  determination  will  depend  on  the 
prevailing  price  level  in  different  communities.  In  wage 
adjustments  it  is  essential  that  attention  be  directed  to 
the  real  wage,  or  the  purchasing  power  of  the  dollar,  and 
not  to  nominal  or  money  wages.  Increasing  use  of  in- 
vestigations of  the  cost  of  living  in  relation  to  wage  ad- 
justments promises  to  promote  industrial  goodwill  and 
peace,  provided  a  progressive  standard  of  life  is  recog- 
nized. If  approached  in  a  proper  manner  and  given  all 
the  facts,  there  is  no  reason  to  believe  that  labor  will 
oppose  wage  reductions  in  periods  of  falling  prices. 

SELECTED  REFERENCES 

BIRD,  F.  H.,  The  Cost  of  Living  in  Wage  Adjustments  in  the 

Book   and  Job  Branch   of  the  Chicago  Printing   Industry, 

Amer.  Econ.  Rev.,  11 :602-642,  Dec.,  1921. 
BUREAU  OP  APPLIED  ECONOMICS,  Washington,  D.  C.,  Standards 

of  Living,  revised  edition,  1920. 
CHAPIN,  R.  C.,  The  Standard  of  Living  Among  Workingmen's 

Families  in  New  York  City,  1909. 


The  Standard  of  Living  55 

KlTTREDGE,   DOROTHEA,    AND   MEEKER,   ROYAL,   Analysis   of   Some 

Effects  of  Increased  Cost  of  Living  on  Family  Budgets, 
United  States  Bureau  of  Labor  Statistics,  Monthly  Labor 
Review,  11 :1-18,  June,  192"0. 

MEEKER,  ROYAL,  What  is  the  American  Standard  of  Living? 
Monthly  Labor  Review,  9:1-13,  July,  1919. 

MEEKER,  ROYAL,  Relation  of  the  Cost  of  Living  to  the  Public 
Health,  Monthly  Labor  Review,  8 :1-10,  Jan.,  1919. 

STECKER,  M.  L.,  Family  Budgets  and  Wages,  Amer.  Eeon.  Rev., 
11:447-465,  Sept.,  1921. 

STREIGHTOFF,  F.  H.,  The  Standard  of  Living  Among  the  Indus- 
trial People  of  America,  1911. 


CHAPTER  V 
WEALTH,  INCOME,  AND  WAGES 

Definitions. — Wealth  is  commonly  referred  to  either  as 
a  quantity  of  commodities  on  hand  at  a  particular  time 
or  as  a  flow  of  goods  during  a  period  of  time.  An  in- 
dividual is  poor  or  wealthy  according  to  the  magnitude 
of  his  claim  on  economic  goods  and  services  available  for 
the  satisfaction  of  his  wants  in  the  present  and  the  future. 
The  term  income,  when  used  in  a  practical  sense,  refers 
to  the  amount  of  money  which  an  individual  receives  from 
the  investment  of  capital  or  from  services.  The  income 
of  the  laboring  classes  usually  is  identical  with  wages, 
or  the  payment  received  for  labor.  Nominal  wages,  it 
will  be  recalled,  are  the  amount  of  money  which  an 
individual  receives  for  work,  while  real  wages  consist  of 
the  quantity  of  goods  and  services  obtainable  with  money 
wages.  The  fundamental  consideration  of  every  normal 
individual  is  not  the  size  of  his  money  income,  but  the 
capacity  of  such  income  to  command  goods  and  services 
in  exchange.  Real  income,  and  not  nominal  income,  is 
what  counts.  One's  income,  therefore,  must  always  be 
interpreted  in  terms  of  the  prevailing  level  of  prices  which 
must  be  paid  for  commodities  and  services  required  in 
the  satisfaction  of  wants. 

Wealth  and  Economic  Status. — If  economic  and  social 
status  is  determined  largely  by  the  power  to  command 
wealth,  the  distribution  of  wealth  and  income  is  an  im- 
portant social  problem.  In  America,  at  least,  wealth  is 
generally,  although  wrongly,  accepted  as  the  standard 
of  success  and  achievement,  and  in  every  country  wealth 
is  the  foundation  of  economic  and  social  well-being.  Food, 
shelter,  and  clothing  are  the  requisites  of  existence,  and 
to  these  the  normal  men  and  women  wish  to  add  a  certain 

56 


Wealthy  Income,  and  Wages  57 

amount  of  culture,  leisure,  and  luxury.  Such  satisfac- 
tions, however,  cannot  be  procured  except  in  exchange 
for  monetary  values. 

The  most  persistent  and  at  the  same  time  the  most 
tragic  fact  in  the  experience  of  the  wage-earning  classes 
is  their  economic  insecurity,  that  is,  the  absence  of  an 
assured  source  of  income.  It  is  a  significant,  though  not 
altogether  pleasant,  fact  that  the  majority  of  people  under 
the  present  economic  system  are  economically  dependent 
upon  a  minority  who  own  and  control  the  machinery  of 
production  and  distribution  of  wealth.  The  majority 
depend  upon  someone  else  for  the  opportunity  to 
earn  a  living,  a  fact  which  explains  their  economic  sub- 
ordination. At  all  times  under  modern  industrialism,  the 
employer  of  labor  controls  the  chance  to  work  and,  conse- 
quently, the  chance  to  live.  Economic  dependence  rather 
than  economic  freedom,  therefore,  is  the  characteristic 
status  of  most  individuals.  As  the  supply  of  free  land 
diminishes,  industrial  dependence  becomes  greater,  and 
there  is  no  outlet  for  the  world's  workers  who  are  dis- 
satisfied with  industrial  conditions.  Unemployment,  debt, 
and  poverty  are  ever  potential  or  actual  fears  for  those 
who  do  not  own  and  control  the  opportunity  to  work. 
The  ownership  of  wealth  or  of  the  agencies  that  produce 
wealth  is,  then,  a  coveted  status.  It  is  for  this  reason 
that  the  distribution  of  wealth  and  income  is  such  an  im- 
portant problem  for  those  who  toil  with  hand  and  brain. 

The  Distribution  of  Wealth  and  Income. — Unreasonable 
disparities  in  the  distribution  of  wealth  and  income  are 
a  persistent  cause  of  social  unrest.  Such  inequalities  ex- 
plain to  a  great  extent  the  present  world  protest  of  the 
working  classes.  The  tendency  of  wealth  to  concentrate 
in  a  few  hands,  whether  resulting  from  legitimate  prac- 
tices or  not,  has  always  been  a  cause  of  bitter  complaint 
by  the  less  fortunate  of  the  population.  "The  rich  are 
getting  richer  and  tho  poor  are  getting  poorer"  is  a 
familiar  form  of  protest  against  this  tendency.  It  is  true 
that  large  fortunes  are  increasing  in  size  and  number, 
but  there  is  also  reason  to  believe  that  pauperism  is  de- 


58  Wealth,  Income,  and  Wages 

creasing  and  that  the  toiling  masses  are  better  off  both 
relatively  and  absolutely  than  they  have  been  in  almost 
any  preceding  century.  It  is  an  interesting  fact,  never- 
theless, that,  as  Professor  Charles  Gide  observes,  the  in- 
equality of  wealth  continues  even  after  many  other 
inequalities  between  persons  have  been  eliminated.  Civil 
equality  has  been  secured  through  law,  political  equality 
through  universal  suffrage,  and  now  a  certain  kind  of 
intellectual  equality  seems  to  be  developing  from  the 
rapid  spread  of  free  education.1  Hereditary  inequalities 
cannot,  of  course,  be  eliminated  so  easily  by  artificial 
agencies,  and  the  stubborn  inborn  forces  of  race  will  con- 
tinue as  a  barrier  to  absolute  equality.  This  fact  has  no 
little  significance  in  explaining  the  persistence  of  ex- 
tremes of  wealth  and  poverty. 

Social  unrest  is  largely  the  reflection  of  a  deep-seated 
conviction  in  the  minds  of  the  masses  that  wealth  and 
income  are  often  distributed  without  regard  to  any  ac- 
ceptable or  desirable  standard  of  justice.  This  conviction, 
the  United  States  Commission  on  Industrial  Relations  sug- 
gests, "is  found  among  all  classes  of  workers  and  takes 
every  form  from  the  dumb  resentment  of  the  day  laborer, 
~who,  at  the  end  of  a  week's  back-breaking  toil  finds  that 
he  has  less  than  enough  to  feed  his  family  while  others 
who  have  done  nothing  live  in  ease,  to  the  elaborate 
philosophy  of  the  'soap-box  orator,'  who  can  quote  sta- 
tistics unendingly  to  demonstrate  his  contentions.  At 
bottom,  however,  there  is  the  one  fundamental,  controlling 
idea  that  income  should  be  received  for  service  and  for 
service  only,  whereas,  in  fact,  it  bears  no  such  relation, 
and  he  who  serves  least  or  not  at  all,  may  receive  most."2 

What  are  the  facts  concerning  the  distribution  of 
wealth  and  income  in  the  United  States  that  lead  to 
general  unrest  among  the  wage-earning  groups?  No  ab- 
solutely correct  information  concerning  this  distribution 
is  available  at  present,  but  several  reliable  studies  have 
been  made.  In  1896  it  was  estimated  that  seven-eighths 

1  Charles  Gide,  Political  Economy,  p.  451. 
'Final  Eeport,  1916,  p.  30. 


Wealthy  Income,  and  Wages  59 

of  the  families  in  this  country  held  but  one-eighth  of  the 
national  wealth,  while  1  per  cent  of  the  families  held 
more  of  the  nation's  wealth  than  the  remaining  99  per 
cent.3  Several  years  ago  (1915)  Professor  W.  I.  King 
estimated  that  the  poorest  class  of  the  population  of  the 
United  States — those  who  possess  little  or  no  property — 
constitute  65  per  cent  of  the  population  and  own  only 
about  5  per  cent  of  the  nation's  wealth;  the  middle  class, 
who  constitute  33  per  cent  of  the  population,  own  35  per 
cent  of  the  wealth;  while  the  rich,  who  form  but  2  per 
cent  of  the  population,  own  60  per  cent  of  the  wealth. 
The  middle  class  is  divided  into  the  upper  middle  class 
and  the  lower  middle  class,  the  former  comprising  that 
18  per  cent  of  the  population  who  own  from  $2,000  to 
$40,000  worth  of  property,  and  the  latter  that  15  per  cent 
who  own  about  $1,000  worth  of  property.  The  rich  are 
those  who  have  wealth  amounting  to  $50,000  or  more  and 
who,  as  a  class,  own  three-fifths  of  the  nation's  wealth. 
From  this  study  it  was  deduced  that,  on  the  basis  of  the 
1910  census,  less  than  2,000,000  people  owned  more  of 
the  national  wealth  than  the  other  98,000,000,  and  that 
the  richest  2  per  cent  of  the  families  received  about  one- 
fifth  of  the  aggregate  income  while  the  poorest  two-thirds 
of  the  families  received  about  39  per  cent  of  the  total 
income.4  The  total  wealth  of  the  United  States  is  often 
estimated  at  $250,000,000,000,  and  the  national  income 
from  $40,000,000,000  to  $60,000,000,000. 

In  1921  the  National  Bureau  of  Economic  Research  pub- 
lished the  results  of  a  very  thorough  study  of  the  dis- 
tribution of  income  in  the  United  States.5  Basing  ita 
conclusions  on  income  statistics  for  1918,  the  bureau  es- 
timated that  60  per  cent  of  the  national  income  was 
divided  among  the  86  per  cent  of  the  gainfully  employed 
who  had  incomes  less  than  $2,000  a  year,  and  about  40 

•C.  B.  Spahr,  The  Present  Distribution  of  Wealth  in  the  United 
States,  p.  69. 

4  See  Wealth  and  Income  of  the  People  of  the  United  States,  by 
W.  I.  King. 

•8ee  Income  in  the  United  States,  by  the  National  Bureau  of 
Economic  Research. 


60  Wealthy  Income,  and  Wages 

per  cent  of  the  national  income  among  the  14  per  cent 
of  the  gainfully  employed  who  had  incomes  exceeding 
$2,000.  The  most  prosperous  5  per  cent  of  income  re- 
ceivers— those  receiving  incomes  of  $3,200  and  above — 
had  nearly  26  per  cent  of  the  total,  while  the  most  pros- 
perous 20  per  cent  of  income  receivers — those  receiving 
above  $1,700 — had  about  47  per  cent  of  the  total  income.6 

It  is  the  existence  of  a  number  of  very  large  incomes 
that  is  most  responsible  for  the  growth  of  envy  and  unrest 
among  American  workingmen.  In  1914  there  were  44 
families  with  incomes  of  $1,000,000  or  more,  whose  mem- 
bers were  said  to  perform  practically  no  service  to  the  na- 
tion but  whose  aggregate  incomes,  totaling  at  least  $50,000,- 
000  a  year,  were  equal  to  the  earnings  of  100,000  wage- 
earners  who  received  $500  each.7  In  1916  there  were 
206  personal  returns  showing  annual  incomes  of  $1,000,- 
000  or  over  and  an  aggregate  income  of  more  than  $464,- 
000,000,  or  the  equivalent  of  the  earnings  of  464,000 
wage-earners  whose  annual  average  wage  was  $1,000. 
The  aggregate  income  of  $306,835,914  received  by  141 
persons  whose  net  incomes  in  1917  were  $1,000,000  and 
over  was  equivalent  to  the  total  earnings  of  approximately 
307,000  laborers  whose  annual  wages  averaged  $1,000. 
In  1919  there  were  5  personal  returns  showing  incomes 
of  $5,000,000  and  over;  6  of  incomes  from  $3,000,000  to 
$4,000,000;  13  of  incomes  from  $1,500,000  to  $2,000,000; 
34  of  incomes  from  $1,000,000  to  $1,500,000;  60  of  incomes 
from  $750,000  to  $1,000,000 ;  129  of  incomes  from  $500,000 
to  $750,000,  and  140  of  incomes  from  $400,000  to 
$500,000.8 

The  Earnings  of  Labor. — Contrasted  with  the  affluence 
of  a  few,  as  indicated  by  statistics  of  incomes,  is  the 
necessitous  position  in  which  the  general  mass  of  wage- 
earners'  families  find  themselves.  The  Commission  on 
Industrial  Relations  concluded  in  1916,  that,  ignoring  the 

•Ibid.,  pp.  146,  147. 

TU.  8.  Commission  on  Industrial  Relations,  Final  Report,  1916, 
p.  30. 

8  Statistics  of  income  returns  published  by  the  U.  8.  Treasury. 


Wealth,  Income,  and  Wages  61 

relatively  few  fairly  well-paid  workers  such  as  glass  blowers, 
railroad  men,  and  builders,  whose  annual  incomes  range 
from  $1,500  to  $2,000,  the  majority  of  American  wage- 
earners  did  not  receive  an  adequate  wage.  Investigation 
had  shown  that  from  one-fourth  to  one-third  of  the  male 
workers  18  years  of  age  and  over  in  factories  and  mines, 
were  receiving  less  than  $10  a  week ;  two-thirds  to  three- 
fourths  were  earning  less  than  $15 ;  and  only  about  one- 
tenth  were  earning  more  than  $20  a  week.  Prom  two- 
thirds  to  three-fourths  of  the  women  workers  in  factories', 
stores,  laundries,  and  industrial  occupations  generally 
were  working  for  less  than  $8  a  week;  approximately 
one-fifth  for  less  than  $4  a  week;  and  nearly  one-half 
for  less  than  $6  a  week.  The  earnings  of  children  were 
even  less  satisfactory.9  Half  of  the  wage-earners'  families 
in  the  United  States  in  1916  were  said  to  have  an  income 
below  the  requirements  for  subsistence.10  Available  in- 
formation concerning  the  incomes  of  wage-earning  families 
before  the  World  War  indicates  that  the  average  wage 
was  between  $700  and  $800  a  year,  which  was  less  than 
the  minimum  required  for  the  subsistence  of  a  normal 
family. 

The  war  brought  with  it  changes  in  prices  and  wages. 
To  what  extent  did  the  wages  of  labor  catch  up  with 
prices?  While  it  is  conceded  that  the  wage  level  was 
given  a  substantial  boost,  impartial  investigators  con- 
cluded that,  on  account  of  the  unprecedented  increase  in 
prices,  the  real  wages  of  the  average  laborer,  except  in 
a  few  war  industries,  did  not  improve  very  materially. 
Statistics  of.  income  for  1918  show  that  about  86  per  cent 
of  persons  who  were  gainfully  employed  had  incomes  of 
less  than  $2,000,  and  about  14  per  cent  had  incomes  ex- 
ceeding that  sum."  At  the  same  time,  official  investiga- 
tions of  the  cost  of  living  indicate  that  not  less  than 
$2,242  was  required  to  maintain  an  average  family  ac- 

'  Commission  on  Industrial  Relations,  Final  Report,  1916,  pp.  31,  32. 
"Carlcton  H.  Parker,  Atlantic  Monthly,  Vol.  120,  pp.  659,  660. 
11  National  Bureau  of  Economic  Research.  Income  in  the  United 
State*,  1921,  p.  146. 


62  Wealth,  Income,  and  Wages 

cording  to  the  minimum  standard  of  health  and  comfort. 
Union  scales  of  time  wages,  as  computed  by  the  United 
States  Bureau  of  Labor  Statistics,  were  89  per  cent  higher 
in  1920  than  in  1913,  while  the  retail  prices  of  principal 
articles  of  food  were  103  per  cent  higher  and  other  items 
in  the  cost  of  living  also  had  advanced  to  an  unpre- 
cedented level.  A  careful  study  of  recent  wage  and  price 
movements  has  led  to  the  conclusion  that  "at  the  termina- 
tion of  the  war  the  return  in  commodities  which  the 
American  workman  received  for  an  equal  length  of  time 
worked  (one  hour)  was  from  10  to  20  per  cent  less  than 
it  was  in  the  decade  1890-1899,  and  from  7  to  17  per  cent 
less  than  it  was  before  the  sharp  upward  movement  of 
prices  in  1916.  The  purchasing  power  of  the  established 
week's  work,  moreover,  was  from  20  to  30  per  cent  less 
than  in  the  nineties  and  from  10  to  20  per  cent  less  than 
in  1915.  American  labor  as  a  whole,  therefore,  cannot 
legitimately  be  charged  with  having  profiteered  during 
the  war. ' ' 12  Following  1920  wage  reductions  of  from  10 
to  30  per  cent  were  generally  made,  except  in  the  highly 
skilled  trades  that  are  powerfully  organized.  Between 
1915  and  1920  unskilled,  unorganized  workers  suffered 
serious  disadvantages  on  account  of  the  failure  of  wages 
to  keep  pace  with  the  cost  of  living,  which  rose  with 
unprecedented  rapidity.  Subsequent  to  1920  these  workers 
suffered  on  account  of  the  precipitate  decline  of  wages 
to  levels  unwarranted  by  the  slight  reduction  that  had 
taken  place  in  the  cost  of  living. 

Salaried  groups,  like  unorganized  wage-earners,  suf- 
fered seriously  as  a  result  of  price  changes.  A  study  of 
government  employees  in  the  District  of  Columbia  showed 
that  91,791  employees  had  an  average  salary  of  $1,321 
in  1919,  as  compared  with  an  average  of  $1,096  in  1893, 
although  in  1919  it  took  $2,839  to  maintain  in  that  locality 
the  same  standard  that  could  be  maintained  by  $1,096 
in  1893.  The  report  of  the  United  States  Commissioner 

"  Paul  H.  Douglas  and  Frances  Lamberson,  ' '  The  Movement  of 
Eeal  Wages,  1890-1918,"  American  Economic  Beview,  VoL  IX,  No. 
3  (Sept.,  1921),  pp.  425,  426. 


Wealth,  Income,  and  Wages  63 

of  Education  for  1917  showed  that  in  1915  the  average 
salary  for  all  public  school  teachers  was  $543.31,  or  $1.73 
per  working-day.  It  was  estimated  that  teachers'  salaries 
increased  from  $543.31  in  1915  to  $630.64  in  1918,  a  gain 
of  only  about  16  per  cent.  The  cost  of  living  had  in- 
creased more  than  86  per  cent  in  many  communities. 
Statistics  from  every  part  of  the  country  support  the 
conclusion  that,  with  a  few  exceptions,  salaried  and  wage- 
earning  groups  in  the  United  States  do  not  share  in  the 
national  income  to  an  extent  adequate  to  guarantee  the 
maintenance  of  a  minimum  standard  of  decency  and  com- 
fort. Even  the  small  savings  some  workers  had  been  able 
to  set  aside  during  the  war  were  exhausted  by  the  severe 
period  of  unemployment  in  1921  and  1922. 

Some  Social  By-Products  of  Low  Wages. — Inade- 
quate incomes  make  it  impossible  for  the  working 
classes  to  enjoy  desirable  conditions  of  housing,  proper 
and  sufficient  food  and  clothing,  efficient  medical 
and  dental  care,  and  necessary  periods  of  rest  and  recrea- 
tion. This  necessitous  condition,  together  with  the  indus- 
trial employment  of  mothers  and  the  accidents,  diseases,  and 
fatigue  resulting  from  employment,  accounts  for  the  ex- 
cessive rates  of  morbidity  and  mortality  among  low- 
income  groups.  It  has  been  said  that  as  we  ascend  the 
social  scale  the  span  of  life  lengthens  and  the  death  rate 
diminishes  gradually,  the  death  rate  of  the  poorest  class 
of  workers  being  three  and  one-half  times  that  of  the 
well-to-do.18  A  French  economist  makes  practically  the 
same  observation  when  he  states  that  the  average  life  is 
three  times  as  long  in  the  rich  classes  as  in  the  poor;  so 
that,  by  a  cruel  irony  of  fate,  the  smaller  the  share  of 
wealth  which  falls  to  a  man,  the  greater  tribute  he  pays 
to  illness,  death,  and  crime.14  In  Glasgow,  Scotland,  the 
death  rate  of  occupants  of  one  and  two  room  cottages 
was  25.7  per  thousand,  and  among  those  occupying  houses 
of  five  or  more  rooms  the  death  rate  was  only  11.2  per 
thousand." 

"John  Sparpo,  The  Bitter  Cry  of  the  Children,  pp.  7  et  teq. 

M  Charles  Oide,  Political  Economy,  pp.  452,  453. 

11  Arthur  Newnholme,   Vital  Statistic*,  p.  163. 


64 

The  following  summary  of  data  on  the  relation  of  earn- 
ings to  infant  mortality  rates  in  the  United  States  is 
striking  evidence  of  the  undesirable  effects  of  inequalities 
in  the  distribution  of  income : 

INFANT  MORTALITY  RATES  ACCORDING  TO  FATHERS'  EARNINGS 
(EIGHT  CITIES)  " 

Infant  Death  Rate 

Earnings  Per  Thousand 

Under  $450  168 

$450  to      $549  134 

$550  to      $649  118 

$650  to      $849  108 

$850  to  $1,049  84 

$1,050  to  $1,249  64 

$1,250  and  over  64 

It  will  be  seen  from  the  foregoing  figures  that  the  death 
rate  for  the  babies  whose  fathers  earned  less  than  $450 
was  168  per  thousand  births,  or  more  than  one  in  every 
six,  while  for  those  whose  fathers  earned  $1,250  or  more 
the  death  rate  was  64  per  thousand,  or  only  one  in  sixteen. 
Of  the  nearly  23,000  babies  studied,  18.2  per  cent  had 
fathers  who  earned  $1,050  and  over;  the  fathers  of  6.2 
per  cent  earned  $1,050  to  $1,249;  of  12  per  cent,  $1,250 
or  more;  of  26.7  per  cent,  less  than  $550;  of  36.9 
per  cent,  between  $550  and  $849;  and  of  15.2  per  cent, 
from  $850  to  $1,049." 

One-third  of  all  American  school  children  of  pre-school 
and  school  age  are  said  to  be  malnourished,  and  from 
20  to  40  per  cent  of  those  graduating  from  elementary 
schools  are  physically  unfit ;  three-fourths  of  the  22,000,- 
000  school  children  in  this  country  have  health  defects 
that  injure  them  as  prospective  citizens,  and  at  least 
4,500,000  are  suffering  from  malnutrition.  It  is  estimated 
that  among  children  with  health  defects  there  are  5,000,000 
with  defective  eyes  and  from  11,000,000  to  16,000,000 
with  defective  teeth.  It  has  been  found  that  while  the 

M  Compiled   from   the    Sixth   Annual  Report  of  the   Chief  of   the 
U.  S.  Children's  Bureau,  1918,  p.  11. 
"Ibid.,  p.  12. 


Wealth,  Income,  and  Wages  65 

food  required  by  a  child  in  a  Philadelphia  working-class 
family  during  the  first  sixteen  years  of  life  would  cost 
$1,750,  the  family  was  actually  able  to  expend  only  $718, 
or  approximately  41  per  cent  of  what  should  have  been 
spent  to  guarantee  the  minimum  requirements  of  health 
and  decency.18  Ignorance  as  well  as  poverty  accounts 
for  a  good  deal  of  unhygienic  living,  but  there  is  an 
irreducible  minimum  of  income  below  which  it  is  impos- 
sible to  provide  adequate  and  proper  diet.  Moreover,  it 
should  be  remembered  that  ignorance  itself  is  often  a 
product  of  poverty. 

Wage  Scales  as  an  Index  of  Earnings. — Much  misap- 
prehension of  the  labor  situation  develops  from  failure 
to  recognize  the  numerous  factors  that  influence  the  actual 
earnings  of  labor.  The  wage  scale  prevailing  in  anj^ 
occupation  or  industry  is  not  necessarily  an  accurate 
measure  of  the  earnings  of  the  workers.  The  loss  of 
working  time  is  a  very  important  factor  that  is  seldom 
recognized  in  wage  statistics.  Seasonal  slackness  and 
periodical  industrial  depression,  as  well  as  other  irregu- 
larities in  employment,  diminish  the  actual  income  of 
labor.  Regularity  of  employment  is  at  least  as  important 
to  the  wage-earner  as  an  adequate  wage  scale.  The  length 
of  the  working-day  is  another  factor  that  is  seldom  repog- 
nized.  For  example,  the  favorable  rates  of  wages  pre- 
vailing in  the  steel  industry  in  the  United  States  have 
often  been  cited  without  reference  to  the  fact  that  the 
twelve-hour  day  has  generally  been  maintained.  Over- 
time also  often  fails  to  receive  recognition  in  statistics 
setting  forth  the  earnings  of  labor.  Finally,  statistics 
are  usually  given  for  money  wages  and  not  for  real 
wages  or  purchasing  power.  Since  price  changes  directly; 
affect  the  real  earnings  of  labor  it  is  always  necessary; 
to  take  into  account  the  changes  in  the  cost  of  living. 

The  Economy  of  Adequate  Wages. — One  of  the  many; 
fallacious  notions  that  prevail  in  industry  is  that  cheap 
labor  is  profitable  labor.  The  more  enlightened  employers 

"Standard*  of  Child  Welfare,  U.  8.  Children '•  Bureau,  Publication 
No.  00,  pp.  238,  248,  250.  Bee  also  pp.  26-80. 


66  Wealthy  Income*  and  Wages 

have  recognized  long  since  that  cheap  labor  is.  expensive 
labor.  Whether  viewed  from  its  economic  or  its  social 
effects,  underpaid  labor  is  undesirable  and  uneconomical. 
Underfed,  inadequately  clothed,  poorly  housed  workers 
are  discontented  workers,  inefficient  producers,  and  poor 
purchasers.  The  belief  has  been  general  that  the  better- 
paid  American  workers  are  more  efficient  than  the  poorly 
paid  European  and  Oriental  workers.  America's  greater 
productivity  can  be  attributed  largely  to  her  superiority 
in  the  technical  organization,  administration,  and  opera- 
tion of  industry.  A  no  less  significant  factor,  however, 
is  that  American  labor,  on  the  whole,  has  been  much  better 
paid  and,  consequently,  much  better  fed,  clothed,  and 
housed,  all  of  which  help  to  determine  efficiency  and 
stimulate  business  activity  on  account  of  increased  buying 
power. 

In  its  social  consequences,  an  inadequate  wage  scale 
imposes  a  heavy  burden  upon  the  community  which, 
through  its  charitable  agencies,  must  ultimately  make  up 
the  deficit  in  the  earnings  of  labor.  The  families  of 
underpaid  workers  become  dependents  and  public  charges, 
if,  indeed,  they  do  not  become  delinquents.  The  alms- 
houses,  public  hospitals,  and  penal  institutions  of  the 
world  have  always  had  among  their  inmates  individuals 
who,  had  they  been  compensated  adequately  for  their 
productive  efforts  in  industry,  would  not  have  resorted 
to  charity  or  public  guardianship.  Inadequate  earnings 
are  not  the  only  cause  of  these  social  problems,  but  they 
constitute  one  of  the  most  important  causes. 

The  undesirable  economic  and  social  effects  of  low 
,  wages  are  accountable  in  a  large  measure  for  the  serious 
and  persistent  indictment  of  the  present  industrial  and 
social  order.  Socialism,  communism,  syndicalism,  an- 
archism, and  other  forms  of  radicalism  have  never 
achieved  the  results  in  the  United  States  that  they  have 
in  Europe,  chiefly  because  American  labor  has  been  much 
better  off.  Adequate  wages  not  only  conduce  to  indus- 
trial efficiency  under  normal  conditions,  and  preclude  the 
development  of  serious  social  problems,  but  also  tend 


Wealthy  Income,  and  Wages  67 

to  diminish  the  power  and  influence  of  revolutionary 
philosophy.  It  is  an  important  fact  that  skilled  workers, 
who  are  better  paid  than  unskilled  workers,  have  been 
and  remain  the  conservative,  constructive  force  in  the 
labor  movement.  This  is  illustrated  by  the  policies  of 
the  railroad  brotherhoods  and  the  American  Federation 
of  Labor,  as  contrasted  with  the  policies  and  purposes 
of  such  radical  organizations  as  the  Industrial  Workers 
of  the  World,  the  membership  of  which  is  recruited 
mainly  from  the  ranks  of  the  poorly  paid  unskilled 
laborers.  The  United  States  Commission  on  Indus- 
trial Relations  observed  that:  "The  welfare  of  the 
State  demands  that  the  useful  labor  of  every  able- 
bodied  workman  should,  as  a  minimum,  be  compensated 
by  sufficient  income  to  support  in  comfort  himself,  a  wife, 
and  at  least  three  minor  children,  and  in  addition  to 
provide  for  sickness,  old  age,  and  disability.  Under  no 
other  conditions  can  a  strong,  contented,  and  efficient 
citizenship  be  developed.  Under  existing  conditions  such 
an  income  is  not  received  by  fully  one-half  of  the  wage- 
earners  employed  in  industry." 

Conclusions. — The  tendency  of  wealth  to  concentrate 
in  a  relatively  few  hands  and  the  existence  of  a  number 
of  what  may  legitimately  be  termed  "excessive  incomes" 
are  facts  that  have  a  significant  effect  upon  the  growth 
of  social  unrest  among  the  masses.  Unreasonable  dis- 
parities in  the  distribution  of  wealth  and  income,  no 
matter  on  what  ground  they  may  be  justified,  accentuate 
the  strife  that  obtains  between  economic  classes  and 
threaten  social  peace  and  progress.  Social  well-being  is 
inextricably  related  to  income,  and  those  whose  incomes 
are  lowest  must  pay  severe  penalties  in  malnutrition,  dis- 
ease, and  death.  Except  in  the  case  of  the  highly  skilled 
and  well-organized  wage-earning  groups  the  income  of 
industrial  workers  is  not  adequate  to  guarantee  the  neces- 
sary protection  of  minimum  standards  of  health,  comfort, 
and  decency.  This  will  be  found  especially  true  in  the 
case  of  wage-earning  women  and  children,  whose  earn- 
ings are  discussed  in  later  chapters.  Certainly  a  society; 


68  Wealth,  Income,  and  Wages 

that  desires  to  make  progress  in  an  orderly  manner  can- 
not look  with  complacency  upon  the  failure  of  the  indus- 
trial system  to  compensate  justly  those  who  toil. 


SELECTED  REFERENCES 

AUSTRALIA,  BUREAU  OP  CENSUS  AND  STATISTICS,   The  Private 

Wealth  of  Australia  and  Its  Growth,  1918,  Parts  I  to  VII. 
HAYES,  E.   C.,  Introduction  to  the  Study  of  Sociology,  1915, 

Chap.  VII. 
INGALLS,  W.  R.,  Wealth  and  Income  of  the  American  People, 

1922. 
KING,  W.  I.,  The  Wealth  and  Income  of  the  People  of  the  United 

States,  1915. 

LAIDLER,  H.  W.,  Socialism  in  Thought  and  Action,  1920,  Chap.  II. 
LAUCK,  W.  J.,  AND  SYDENSTRICKER,  EDGAR,  Conditions  of  Labor 

in  American  Industries,  1917,  Chaps.  II  and  VI. 
NATIONAL  BUREAU  OF  ECONOMIC  RESEARCH,  NEW  YORK  CITY, 

Income  in  the  United  States,  Its  Amount  and  Distribution, 

1909-1919,  1921. 

UNITED  STATES  CHILDREN'S  BUREAU,  Standards  of  Child  Wel- 
fare  (Conference  Series,  No.  1),  Bureau  Publications  No. 

60:21-46. 
UNITED  STATES  COMMISSION  ON  INDUSTRIAL  RELATIONS,  Final 

Beport,  1916,  pp.  30-38,  68-69. 


CHAPTER  VI 
THE  DETERMINATION  OF  WAGES 

The  Wage  System. — As  ordinarily  defined,  wages  con- 
sist of  the  income  which  a  man  receives  in  exchange  for 
his  labor.  Such  a  definition,  however,  is  too  compre- 
hensive, since  one  might  readily  think  of  capitalists,  land- 
lords, and  business  enterprisers  as  receiving  an  income  for 
their  labor,  either  intellectual  or  physical.  Wages  are 
the  share  in  distribution  which  is  assigned  to  the  laborers 
in  return  for  their  efforts  in  production,  as  distinguished 
from  rent,  interest,  and  profits  which  are  the  shares  as- 
signed to  land,  capital,  and  the  business  enterpriser, 
respectively.  The  term  wages  is  applicable  not  to  every 
method  of  remuneration  of  labor,  but  only  to  a  "special 
mode  known  as  the  price  of  labor  hired  and  employed  by 
an  entrepreneur.  .  .  .M1  This  definition  implies  clearly 
that  in  modern  industrial  society  there  is  a  "laboring 
class,"  which  is  generally  differentiated  from  professional 
men  and  salaried  employees  who  are  also  wage-earners  in 
the  general  economic  sense.  What  may  be  designated  the 
' '  laboring  class  proper ' '  includes  the  great  mass  of  skilled, 
semiskilled,  and  unskilled  laborers,  factory  hands,  agricul- 
tural workers,  mercantile  clerks,  and  employees  in  other 
occupations  who  sell  their  labor  for  wages. 

The  wage  system  is  inseparable  from  modern  indus- 
trialism with  its  individualistic  or  semi-individualistic 
character.  Whether  wages  represent  the  ideal  method  of 
industrial  remuneration  and  the  wage  system  constitutes 
the  final  stage  in  the  development  of  that  remuneration 
is  at  least  a  debatable  question.  At  any  rate,  the  wage 
system  is  different  from  preceding  systems  of  employ- 
ment, and  is  to-day  the  dominant  method  of  industrial 

1  Charles  Gide,  Political  Economy,  p.  572. 

69 


70  The  Determination  of  Wages 

compensation.  In  a  state  of  savagery  the  laborer  directs 
his  own  labor  and  becomes  sole  owner  of  his  product; 
under  slavery  the  master  owns  and  directs  the  laborer 
and  his  labor,  and  has  complete  ownership  and  control 
of  the  product ;  under  the  wage  system  the  employer  pur- 
chases labor  offered  for  sale  by  the  laborer,  pays  a  specific 
price  for  the  labor,  and  secures  complete  ownership  and 
control  of  the  product.  Thus  the  wage  system  is  a  rela- 
tively new  method  of  industrial  remuneration ;  "  a  method, ' ' 
as  Professor  Gide  states,  "which  only  becomes  general 
with  the  modern  capitalistic  organization  of  industry,  and 
may  possibly  disappear  along  with  it. " 2 

The  Problem  of  Distribution  in  Relation  to  Labor. — It 
is  often  said  that  we  have  measurably  solved  the  problem 
of  wealth  production.  A  hundred  years  of  modern  indus- 
trialism has  increased  the  production  of  wealth  beyond 
all  precedent.  While  it  may  be  true  that,  mechanically, 
the  problem  of  wealth  production  has  been  solved,  there 
are  human  elements  in  production  which  are  only  just 
beginning  to  command  attention,  and  until  the  specific 
problems  associated  with  the  human  factor  in  industry 
have  been  solved  a  solution  of  the  general  problem  of 
production  will  not  be  perfected.  Nevertheless,  the  ma- 
jority of  social  problems  that  command  the  attention  of 
social  analysts  to-day  deal  directly  or  indirectly  with  the 
distribution  of  the  product  of  industry.  Social  well-being 
and  social  progress  depend  upon  the  proper  solution  of 
this  problem.  Social  reformers  are  constantly  asking  why 
it  is  that  so  much  poverty  exists  in  the  midst  of  so  much 
wealth  and  national  prosperity.  The  general  answer  is: 
There  is  a  conspicuous  maladjustment  in  the  distribu- 
tion of  the  product  of  industry.  The  problem  of 
distribution,  therefore,  necessarily  consists  in  ascertaining 
the  causes  of  inequality  in  the  distribution  of  the  product 
of  industry  and  in  formulating  an  efficient  remedy  for 
this  maladjustment.  For  over  a  century  economists  have 
tried  to  discover  the  fundamental  determinants  of  the 
shares  which  the  factors  in  production — land,  labor,  capital, 
.t  pp.  572,  573. 


The  Determination  of  Wages  71 

and  the  entrepreneur — receive  in  distribution  of  the 
product.  It  is  not  within  the  province  of  this  discussion 
to  analyze  the  general  problem  of  distribution;  it  is  con- 
cerned primarily  with  the  determination  of  the  price  of 
labor,  or  wages.  A  resume  of  wage  theories  will  aid 
materially  in  forming  a  judgment  concerning  the  nature 
of  these  determinants. 

The  Cost  of  Subsistence  Theory. — The  fundamental 
postulate  of  the  first  important  and  scientific  theory  of 
wages  was  that  the  income  of  labor  is  determined  by  the 
cost  of  subsistence  of  the  laborers.  The  basis  of  this 
theory  is  the  fact  that  labor-power,  under  the  wage  sys- 
tem, is  a  commodity  bought  and  sold  on  the  market.  The 
workers  offer  their  labor  for  sale ;  the  employers  purchase 
this  labor.  The  sole  determinant  of  the  value  of  labor 
is  the  cost  of  commodities  on  which  the  laborers  subsist. 
The  cost  of  producing  the  labor  supply  will  depend  upon : 
(1)  the  price  of  all  the  commodities  and  services  which 
the  laborer  must  have  in  order  to  maintain  his  productive 
power;  and  (2)  the  amount  necessary  to  maintain  the 
labor  supply,  that  is,  to  replace  worn-out  laborers,  which 
is  measured  by  the  actual  cost  of  rearing  a  child  to  adult" 
age. 

The  advocates  of  this  theory  call  attention  to  the  fact 
that  labor,  like  all  other  commodities,  has  its  natural  price 
and  its  market  price.  "The  natural  price  of  labor  is  that 
price  which  is  necessary  to  enable  the  laborers,  one  with 
another,  to  subsist  and  perpetuate  their  race,  without  either 
increase  or  diminution."  The  natural  price  of  labor,  there- 
fore, depends  upon  the  cost  of  subsistence.  The  market 
price  of  labor  is  the  price  that  is  actually  paid  for  it  in 
response  to  the  operation  of  the  forces  of  supply  and 
demand.  The  market  price  will  be  high  when  labor  is 
scarce,  and  low  when  labor  is  abundant.  The  market 
price  of  labor,  like  the  market  price  of  any  other  com- 
modity, tends  to  conform  to  the  normal  price — the  cost 
of  production.  Whenever  the  market  price  of  labor  ex- 
ceeds the  natural  or  normal  price  the  worker  enjoys  pros- 
perity because  of  increased  wages.  But  high  wages  serve 


72  The  Determination  of  Wages 

merely  to  swell  the  supply  of  labor  and  degrade  the  posi- 
tion of  the  worker.  Here,  however,  natural  law  rescues 
the  worker  from  continued  wretchedness  and  poverty. 
The  lack  of  necessities  resulting  from  low  wages  auto- 
matically diminishes  the  population  and,  consequently,  the 
labor  supply.  The  return  to  a  normal  wage  takes  place 
as  the  labor  supply  falls  off.  An  increase  in  the  demand 
for  labor  may  force  a  similar  readjustment. 

The  worker  is  crushed  between  high  prices  on  the  one 
hand  and  low  wages  on  the  other.  The  reproductive 
instinct  operates  continually  to  increase  the  population, 
thus  enhancing  the  supply  of  labor,  and  the  law  of 
diminishing  returns  operates  always  to  force  a  continuous 
rise  in  commodity  prices.  The  advocates  of  the  sub- 
sistence theory  contend  that:  "The  condition  of  the  labor- 
ing poor,  supposing  their  habits  to  remain  the  same, 
cannot  be  very  essentially  improved  but  by  giving  them 
a  greater  command  over  the  means  of  subsistence.  But 
an  advantage  of  this  kind  must  from  its  very  nature  be 
temporary,  and  is  therefore  really  of  less  value  to  them 
than  a  permanent  change  in  their  habits."  Economic 
organization  will  avail  nothing;  the  wages  of  labor 
inevitably  tend  to  a  minimum  cost  of  subsistence.  It  is 
little  wonder  that  Lasalle  characterized  this  theory  as 
"The  Iron  Law  of  Wages."  Under  the  operation  of 
such  a  law  the  condition  of  the  working  classes  would  be 
irretrievably  hopeless. 

Such  a  theory  of  wages  is  obviously  untenable.  It  has 
been  justly  criticized  as  being  mainly  a  theory  of  the 
supply  price  of  labor,  neglecting  almost  entirely  the  pos- 
sibility of  a  demand  price.  Even  as  a  theory  of  the  supply 
price  of  labor  it  is  not  adequate.  The  supply  price  of 
labor  is  not  determined  solely  by  the  cost  of  bare  sub- 
sistence. The  cost  of  subsistence  is  not  a  minimum  below 
which  the  wages  of  labor  cannot  fall,  nor  is  it  a  maximum 
above  which  the  wage  level  may  not  rise.  Moreover, 
the  cost  of  subsistence  is  not  a  definitely  measurable 
concept.  The  standard  of  subsistence  is  not  a  fixed  but 
an  elastic  thing.  The  cost  of  subsistence  theory  of  wages 


The  Determination  of  Wages  73 

is  based  upon  the  assumption  that  labor  is  a  commodity 
having  all  the  characteristics  of  other  commodities  that 
are  bought  and  sold  on  the  market,  yet  the  theory  makes 
practically  no  allowance  for  the  demand  price  of  labor. 
Not  only  is  labor  not  a  commodity,  but  it  has  both  a 
demand  price  and  a  supply  price,  each  of  which  are  char- 
acterized by  variation.  Moreover,  effective  labor  organ- 
ization is  able  to  raise  the  scale  of  wages  above  the  mini- 
mum required  for  subsistence. 

The  Wages-Fund  Doctrine. — The  cost  of  subsistence 
theory  of  wages  was  superseded  by  the  wages-fund  doc- 
trine, which  states  that  the  rate  of  wages  depends  on  the 
proportion  that  obtains  between  the  population  and 
capital — supply  and  demand.  The  supply  of  labor  con- 
sists of  those  who  are  seeking  employment,  while  demand 
consists  of  capital  seeking  investment  in  productive  enter- 
prise. Wages  depend  on  the  proportion  of  the  laboring 
population  to  the  quantity  of  capital — the  quantity  of 
food,  raw  material,  machinery,  and  other  fundamental 
requisites  of  production.  If  population  increases  with- 
out a  corresponding  increase  in  the  capital  fund,  a  decline 
in  wages  takes  place;  if  the  capital  fund  increases  with- 
out a  proportionate  increase  in  population,  wages  in- 
evitably rise;  if  the  ratio  remains  constant,  the  wage 
scale  will  not  change.  "Wages,  then,  depend  mainly 
upon  the  demand  and  supply  of  labor;  or,  as  it  is  often 
expressed,  on  the  proportion  between  population  and 
capital.  By  population  is  here  meant  the  number  only 
of  the  laboring  class,  or  rather  those  who  work  for  hire ; 
and  by  capital,  only  circulating  capital,  and  not  even  the 
whole  of  that,  but  the  part  which  is  expended  in  the 
direct  purchase  of  labor."'  According  to  the  wages-fund 
doctrine  the  workers  cannot  influence  the  labor  market. 
The  law  of  wages  is  as  independent  of  them  as  is  the 
law  of  gravitation;  both  are  beyond  their  control. 
Economic  organization,  custom,  legislative  interference, 
or  any  other  regulatory  measures  are  impotent  before  thia 

•John  Stuart  Mill,  Principle*  of  Political  Economy  (Ashley  Edi- 
tion), Book  II,  Chap.  XI,  p.  343. 


74  The  Determination  of  Wages 

law.  The  only  source  of  variation  lies  in  increasing  the 
wages-fund  by  saving  more  capital  for  the  employment 
of  labor,  or  in  the  application  of  the  Malthusian  principle 
of  limiting  the  population  by  delayed  marriage  and  con- 
trol of  the  birth  rate. 

That  the  wages  of  labor  are  paid  out  of  a  fund  of 
capital  is  undeniable.  Critics  of  the  wages-fund  doctrine, 
however,  have  pointed  out  that  the  doctrine  is  untenable 
because :  (1)  As  a  matter  of  fact,  there  is  no  distinct  fund 
which  is  definitely  apportioned  for  the  payment  of  wages, 
and  (2)  the  doctrine  is  based  upon  a  wrong  interpretation 
of  the  influence  and  nature  of  demand  and  supply  in  the 
determination  of  the  price  of  labor.  Early  critics  of  the 
doctrine  endeavored  to  prove  that  wage-earners  by  effec- 
tive organization  can  influence  the  rate  of  wages.  Indeed, 
it  was  the  increasing  effectiveness  of  labor  organization 
that  totally  discredited  the  doctrine  in  its  original  form. 
Later  critics  have  shown  that  the  circulating  capital  which 
constitutes  the  wage-fund  is  itself  a  product  of  labor- 
power.  The  wages-fund  is  a  reservoir  filled  by  a  pump, 
as  needs  require,  and  this  pump  is  labor.  Moreover,  this 
doctrine  affords  no  explanation  of  the  marked  inequalities 
that  exist  in  the  wage  scales  between  different  trades 
within  the  same  country.  The  wages-fund  doctrine  con- 
tains an  element  of  truth.  There  is  a  necessary  causal 
relation  between  the  quantity  of  capital  and  the  wages 
of  labor;  a  marked  decrease  in  the  supply  of  capital 
available  for  the  employment  of  labor  and  other  requisites 
of  production  would  affect  wages  adversely  by  decreasing 
demand.  Although  the  fund  of  capital  might  be  restored 
eventually,  through  the  efforts  of  labor,  the  immediate 
result  of  a  marked  decrease  in  the  supply  of  capital  would 
be  a  reduction  in  the  wages  of  labor.  The  wages-fund, 
however,  is  neither  fixed  nor  measurable. 

The  Residual  Claimant  Theory. — According  to  this 
theory  the  wages  which  the  laborer  receives  are  ultimately 
equated  to  what  he  produces  after  the  deduction  of  rent, 
taxes,  profits,  and  the  interest  of  capital.  Rent,  interest, 
and  profits  are  determined  by  definite  laws,  while  wages 


The  Determination  of  Wages  75 

constitute  a  more  or  less  indeterminate  share  of  the  social 
product.  Thus  the  wage-earner  is  the  residual  or  last 
claimant,  and  is  forced  to  wait  until  all  other  shares  in 
distribution,  including  taxes,  have  been  apportioned.  The 
share  of  this  product  which  goes  to  labor  is  residual  in 
the  sense  that  wages  measure  the  quantity  of  the  product 
that  remains  after  the  claims  of  other  factors  in  produc- 
tion have  been  satisfied  according  to  the  determination 
of  positive  laws. 

The  advocates  of  the  residual  claimant  theory  failed 
to  recognize  that,  by  effective  combination  or  because 
of  other  forces  that  may  influence  the  labor  market,  labor, 
like  any  commodity,  may  possess  a  scarcity  or  monopoly 
value.  Being  the  residual  claimant,  the  workers  cannot 
increase  or  decrease  their  share  in  the  product  of  industry. 
Since  the  other  shares  are  determined  by  definite  laws, 
the  wage-earner  has  no  alternative  but  to  wait  until  these 
shares  have  been  distributed  and  then  take  what  is  left. 
Since  under  our  economic  system  the  ownership  and  con- 
trol of  the  product  is  vested  in  the  business  enterpriser, 
the  wage-earner  might  receive  as  a  residual  claim  either 
more  or  less  than  he  anticipated.  There  is  no  justification 
for  describing  the  laborer  as  the  residual  claimant.  The 
sale  of  the  product  and  the  receipts  from  that  sale  are 
controlled  by  the  enterpriser  who  must  apportion  shares 
to  the  other  agents  in  production  prior  to  the  satisfaction 
of  his  own  claim.  The  enterpriser's  share  is  more  truly 
residual ;  he  must  take  what  is  left  after  paying  all 
expenses  of  production.  Moreover,  labor  frequently  re- 
ceives its  share  long  before  the  product  is  disposed  of 
and  often  before  the  other  shares  have  been  paid. 

The  Specific  Productivity  Theory. — Among  the  most 
generally  expounded  wage  doctrines  of  the  present,  the 
so-called  productivity  theory  is  by  far  the  most  promi- 
nent. This  is  especially  true  in  the  United  States,  where 
the  doctrine  has  claimed  the  largest  number  of  adherents. 
According  to  this  theory  the  price  of  labor,  like  the  value 
of  any  commodity,  is  determined  by  final  utility.  The 
fundamental  determinant  of  wages  is  the  specific  product 


76  The  Determination  oj  Wages 

of  labor.  Both  capital  and  labor  contribute  something 
to  the  product.  A  specific  product  is  thus  ascribed  to 
capital,  and  a  specific  product  to  labor,  and  under  con- 
ditions of  perfect  competition,  each  tends  to  receive  a 
share  equivalent  to  what  it  produces.  As  in  the  case  of 
other  factors,  the  final  or  marginal  productivity  of  the 
workers  will  be  the  ultimate  determinant  of  their  wages. 
The  essential  element,  therefore,  is  the  marginal  utility  of 
the  service  which  the  worker  renders  to  the  enterpriser. 
Under  the  condition  assumed — perfect  competition — the 
value  of  the  goods  produced  by  the  marginal  laborer  de- 
termines not  only  the  maximum  which  the  employer  can 
afford  to  give  him,  but  also  the  amount  given  to  all  other 
workers  who  can  take  his  place,  that  is,  who  are  employed 
in  the  same  kind  of  work,  although  they  may  be  more 
productive  than  he  is.  The  least  productive  laborer  de- 
termines the  wages  of  the  group.  The  owner  of  capital 
adds  units  of  labor  until  he  finds  that  the  last  unit  applied 
adds  to  the  product  an  amount  which  must  be  paid  to 
the  worker  in  order  to  induce  him  to  accept  the  job  of- 
fered by  this  particular  owner  of  capital  rather  than  that 
offered  by  another.  This  individual  who  is  just  worth 
employing  is  known  as  the  marginal  worker.  Under  com- 
petitive conditions  labor,  like  capital,  tends  to  get  what 
it  produces. 

The  productivity  theory  assumes  a  separate  produc- 
tivity of  capital  as  well  as  of  labor.  Practically,  it  is  im- 
possible to  measure  a  separate  product  assignable  to  any, 
factor  in  production  dissociated  from  the  other  factors 
in  production.  The  theoretical  and  practical  validity  of 
this  theory  depends  upon:  (1)  the  existence  of  the  con- 
ditions assumed  in  the  theory,  and  (2)  the  possibility  of 
measuring  the  specific  product  of  each  factor  in  produc- 
tion. Critics  of  the  productivity  theory  are  quite  agreed 
that  the  separatist  treatment  of  productivity  is  futile. 
Land,  labor,  capital,  and  the  entrepreneur  cannot  be 
divorced  from  one  another  in  the  processes  of  production. 
Even  if  it  were  possible  to  ascribe  a  separate  productivity 
to  each  of  these  factors  or  to  the  marginal  unit  of  any. 


The  Determination  of  Wages  77 

one  of  the  factors  working  in  conjunction  with  other 
units,  the  productivity  could  not  be  measured.  Produc- 
tion is  cooperative  in  the  sense  that  it  usually  requires 
the  power  of  more  than  one  factor.  To  attribute  a 
specific  and  distinct  productivity  to  any  one  factor  or 
unit,  therefore,  whether  marginal  or  otherwise,  is  mani- 
festly unwarranted.  If  it  is  impossible  to  measure  the 
specific  product  of  any  factor  or  part  of  a  factor  in  pro- 
duction, then  it  would  appear  equally  futile  to  attempt 
to  ascribe  to  any  factor  a  share  in  the  distribution  of  the 
product  equivalent  to  what  it  produces.  It  cannot  be  said, 
therefore,  that  the  laborer  gets  what  he  produces;  his 
share  in  distribution  will  depend  upon  numerous  con- 
ditions that  affect  the  labor  market  and  the  price  of 
labor. 

The  productivity  theory  fails  also  as  an  explanation  of 
wages  because  its  fundamental  assumption — a  state  of 
perfect  competition — is  not  true.  Perfect  competition  pre- 
supposes absolute  mobility  of  the  factors  under  considera- 
tion. Absolute  freedom  of  competition  and  substitution 
prevail  only  in  a  so-called  "balanced  economic  system." 
The  present  industrial  system  is  characterized  by  no  such 
balance.  Both  as  a  productive  and  as  a  distributive 
agency  combination  is  at  least  as  real  as  competition,  and 
the  indications  are  that  combination  in  some  form  is  des- 
tined to  dominate  the  fields  of  production  and  distribu- 
tion. Precluding  obstructions  to  the  free  operation  of 
perfect  competition,  it  might  be  true  that  each  factor  in 
production  would  be  assigned  what  it  specifically  pro- 
duced. The  difficulty,  however,  lies  not  only  in  the  phys- 
ical impossibility  of  determining  and  measuring  this 
specific  product,  but  also  in  the  fact  that  obstructions  do 
obtain  in  the  present  industrial  system  to  prevent  absolute 
fluidity  and  mobility  of  competitive  forces.  Certainly  per- 
fect mobility  and  adaptability  cannot  be  said  to  charac- 
terize the  present  economic  structure. 

The  Normal  Value  or  Exchange  Theory. — The  main 
contention  of  this  theory  is  that  normal  wages  contain  a 
surplus  above  the  mere  cost  of  subsistence;  that  social 


78  The  Determination  of  Wages 

progress  is  dependent  upon  the  existence  of  a  surplus  in 
normal  wages  in  excess  of  the  amount  required  to  main- 
tain the  prevailing  standard  of  living.  To  this  surplus 
the  name  "gain  of  labor"  is  given.  Normal  wages  in  a 
progressive  society  must  contain  a  surplus  that  compen- 
sates the  laborer  for  abstinence  or  postponement  of  con- 
sumption. A  conflict  develops  between  the  time  needed 
to  produce  goods  and  the  time  required  to  consume  goods. 
The  worker  balances  the  pleasure  of  consumption  against 
the  pain  or  disutility  of  production.  To  forego  the  pleas- 
ure incident  to  the  consumption  of  goods  which  he  already 
possesses,  the  worker  must  be  offered  some  inducement, 
that  is,  a  surplus  gain. 

Advocates  of  the  exchange  theory  claim  that  it  is  pos- 
sible to  develop  an  abstinence  theory  of  wages  similar 
to  the  abstinence  theory  of  interest.  The  marginal  saver 
will  not  endure  the  disutility  of  abstinence  unless  he  is 
assured  a  corresponding  surplus  in  his  future  product.  In 
other  words,  the  disutility  involved  in  saving  must  be 
compensated  by  surplus  income.  The  same  is  true  of 
labor.  Special  laborers  may  receive  more  or  less  than 
normal  wages,  but  all  labor  that  is  free  to  move  must 
receive  at  least  a  normal  wage.  In  order  to  secure  a 
surplus  the  hours  of  employment  are  prolonged  beyond 
the  point  sufficient  to  guarantee  the  accepted  standard. 
Normal  value  arises  when  marginal  utility  and  marginal 
disutility  are  equal.  Surplus  value  is  a  product  of  time. 
The  workers  exchange  present  services  for  future  goods. 
Time  required  for  the  application  of  the  worker's  power 
may  interfere  with  time  required  for  consumption  of  pres- 
ent goods,  thus  causing  abstinence.  For  this  postpone- 
ment of  consumption  labor  receives  a  surplus  gain. 

The  normal  value  theory  is  applicable  only  to  a  dy- 
namic industrial  order,  since  no  surplus  gain  can  emerge 
in  a  static  society.  Normal  value  can  be  definitely  deter- 
mined in  a  progressing  society,  and  normal  wages  must 
include  a  gain  equal  to  abstinence  on  the  part  of  the 
laborer.4  Market  wages  are  incapable  of  exact  determi- 

4  Charles  W.  Macfarlane,  Value  and  Distribution,  p.  303. 


The  Determination  of  Wages  79 

nation.  Normal  value  theorists,  then,  seek  to  account  for 
a  surplus  in  wages  above  the  necessary  cost  of  subsistence, 
and  to  demonstrate  that  in  a  dynamic  society  both  capital 
and  labor  must  secure  a  surplus  above  the  cost  of  main- 
tenance. They  admit  that  in  such  a  society  many  do  not 
secure  any  surplus  or  gain  of  labor,  but  this  does  not, 
in  their  opinion,  invalidate  the  law.  The  necessary  condi- 
tion is  mobility  of  labor,  and  the  loss  of  mobility  may 
mean  loss  of  gain  or  surplus. 

Like  the  old  cost  of  subsistence  theory,  from  which  it  is 
a  derivation,  the  normal  value  or  exchange  theory  em- 
phasizes the  element  of  labor  supply  to  the  exclusion  of 
the  element  of  labor  demand  as  the  ultimate  determinant 
of  wages.  In  common  with  the  productivity  theory  it 
assumes  a  condition  of  free  mobility  of  labor  as  the  fun- 
damental condition  of  the  law  of  wages,  but  no  such  con- 
dition exists  in  the  present  industrial  system.  Moreover, 
it  is  as  difficult  to  measure  the  abstinence  of  the  marginal 
laborer  as  it  is  to  determine  his  specific  product.  The 
practical  value  of  such  a  theory,  therefore,  is  negligible. 

The  Bargaining  Theory. — According  to  the  bargaining 
theory,  employers  and  employees  are  opposed  to  each 
other  as  bargainers  in  a  market  where,  on  account  of 
various  causes,  their  forces  are  about  equal.5  Wages, 
accordingly,  are  to  be  regarded  as  determined  in  a  man- 
ner identical  with  the  determination  of  all  values ;  namely, 
by  (1)  the  estimate  which  each  party  to  the  bargain  has 
formed  concerning  the  value  of  the  subject  of  the  bargain, 
and  (2)  the  comparative  bargaining  strength  and  knowledge 
of  the  bargainers.  The  advocates  of  this  theory  point  out 
that  the  earlier  wage  theories  erred  in  attempting  to 
establish  one  determining  principle  of  wages,  according 
as  they  recognized  the  supremacy  of  the  employer  or  the 
supremacy  of  the  laborer,  while  the  bargaining  theory 
avoids  this  mistake  by  recognizing  the  phenomenon  of 
organization  of  employers  and  employees  in  combinations 
of  approximately  equal  strength,  and  contends  that  the 

•John  Davidson,  The  Bargain  Theory  of  Wages,  p.  4. 


80  The  Determination  of  Wages 

wages  of  labor  will  be  determined  between  the  two  esti- 
mates made  by  employers  and  laborers. 

What  forces  determine  each  of  these  two  estimates? 
The  estimate  of  the  laborer  is  described  as  the  resultant 
of  two  factors;  namely,  the  utility  of  reward  and  the 
.disutility  of  work.  The  estimate  of  the  employer  depends 
upon  the  gains  or  discounted  value  of  the  product  created 
by  the  worker's  efforts.  Each  party  to  the  bargain  seeks 
to  gain  the  greatest  return ;  the  employer  has  a  maximum, 
and  the  worker  a  minimum  evaluation.  The  price  of  labor 
will  be  determined  between  these  limits  by  the  compara- 
tive bargaining  strength  of  employers  and  employees.  It 
is  important  to  note  that  neither  of  these  limits  is  abso- 
lutely fixed,  although  they  are  relatively  so.  The  stand- 
ard of  comfort  is  the  most  important  element  in  the 
laborer's  estimate,  but  both  the  utility  of  reward  and  the 
disutility  of  work  are  subject  to  independent  variations. 
Since  there  is  less  of  the  personal  factor  in  the  employer's 
estimate,  it  is  likely  to  be  more  definite  than  the  worker's 
estimate.  Consequently,  the  maximum  limit  is  practically 
fixed,  and  any  attempt  to  raise  wages  above  this  limit 
must  prove  futile.  Wages  will  approach  the  employer's 
maximum  if  the  laborers  possess  exceptional  bargaining 
power,  but  will  descend  to  the  workers'  minimum  if  the 
latter 's  bargaining  power  is  weak.  By  effective  organiza- 
tion and  combination  the  disputed  margin  will  in  all  prob- 
ability go  to  the  workers,  provided  the  employers  have 
not  effected  similar  organization  and  combination. 

The  bargaining  theory  of  wages  recognizes  the  in- 
equality that  characterizes  the  bargaining  process  in  mod- 
ern industry.  Bargaining  power  depends  on  knowledge 
of  the  labor  market.  On  account  of  his  superior  knowl- 
edge and  the  wider  opportunities  he  possesses  to  obtain 
information  relating  to  the  market,  the  employer  enjoys 
a  differential  advantage  in  bargaining.  Advocates  of 
the  bargaining  theory  find  grounds  for  optimism,  how- 
ever, in  the  influence  of  general  education,  dissemination 
of  industrial  news  by  the  press,  and  the  publicity  work  of 
labor  organizations,  federations,  and  industrial  bureaus, 


The  Determination  of  Wages  81 

all  of  which  tend  to  eliminate  the  superior  advantage  of 
the  employer.  Nevertheless,  they  admit  that  the  superior 
advantage  still  rests  with  the  employer.  Another  factor 
affecting  the  wage  level  is  recognized;  namely,  the  im- 
mobility of  labor.  As  a  rule,  laborers  do  not  enjoy  abso- 
lute freedom  of  migration  either  from  one  job  to  another 
or  from  one  industry  to  another,  much  less  from  one 
locality  to  another,  so  that  advantage  cannot  always  be 
taken  of  the  higher  wage  level  elsewhere,  even  when  the 
workers  are  aware  of  such  advantages.  Every  disability 
that  characterizes  the  laborer  has  an  adverse  effect  upon 
his  bargaining  strength  and  tends  to  force  the  wage  down 
to  the  minimum  limit.  Consequently,  the  workers  seek  to 
minimize  their  disabilities  by  organization  and  collective 
bargaining.  Disastrous  competition  is  thus  removed. 
The  position  of  labor  may  be  aided  also  by  legal  inter- 
ference or  by  public  opinion,  although  experience  has 
taught  the  workers  that  reliance  cannot  be  placed  upon 
public  opinion. 

The  bargaining  theory  of  wages  possesses  an  element 
of  practicality  which  is  absent  from  the  earlier  theories. 
That  bargaining  power  is  a  potent  force  in  the  determina- 
tion of  wages,  few  will  deny.  The  facts  of  trade  union 
experience  support  this  conclusion.  The  theory  is  incon- 
sistent in  declaring  that  between  the  specified  maximum 
and  minimum  the  wage  is  set  by  employers  and  employees 
whose  bargaining  strength  is  about  equal,  and  then  pro- 
ceeding to  explain  the  conditions  that  give  the  employer 
a  differential  advantage.  Although  certain  forces  are  at 
work  which  tend  to  equalize  the  bargaining  strength  of 
employers  and  employees,  it  is  still  true  that  the  bargain- 
ing status  of  these  two  industrial  groups  is  conspicuously 
unequal.  Moreover,  while  such  a  theory  may  account 
for  wage  determination  in  those  trades  and  industries  in 
which  the  workers  and  the  employers  are  strongly  organ- 
ized, it  docs  not  explain  the  forces  that  determine  wages 
in  the  unorganized  industries,  nor  does  it  afford  explan- 
ation of  the  differences  that  obtain  in  the  wage  scales 
of  organized  groups  in  different  trades  and  industries  and 


82  The  Determination  of  Wages 

in  different  countries.  In  brief,  if  all  laborers  and  all  em- 
ployers were  organized  and  enjoyed  equal  bargaining 
power,  a  bargaining  theory  of  wages  might  be  applicable 
to  the  present  industrial  system.  As  a  matter  of  fact", 
only  a  comparatively  small  percentage  of  the  world's 
gainfully  employed  persons  are  organized.  The  theory, 
therefore,  is  not  sufficiently  comprehensive  to  be  generally; 
applicable  to  the  present  industrial  order. 

The  Socialist  Explanation  of  Wages. — Karl  Marx,  the 
founder  of  modern  scientific  socialism,  was  convinced  that 
the  propertied  class  had  always  lived  upon  the  labor  of 
the  nonpropertied  classes.  According  to  Marx,  labor  is 
not  merely  the  measure  of  value  and  the  essential  cause 
of  value,  but,  what  is  far  more  significant,  labor  is  the 
very  essence  of  value.  Commodities  have  value  in  ex- 
change because  they  represent  the  expenditure  of  a  cer- 
tain amount  of  human  energy.  Marx  did  not  deny  the 
existence  of  utility;  he  recognized  utility  as  a  necessary 
condition  of  value  and  as  the  only  factor  to  be  considered 
in  subjective  value,  or  value  in  use.  The  element  of  utility, 
however,  does  not  suffice  to  account  for  objective  value 
or  value  in  exchange.  Every  act  of  exchange  presupposes 
a  common  element ;  there  must  be  some  identical  relation 
between  all  commodities  exchanged.  This  necessary  iden- 
tity between  exchanged  commodities  cannot  be  explained 
in  terms  of  utility,  since  utility  is  a  heterogeneous  quality, 
differing  with  different  commodities.  A  homogeneous 
element  must  be  discovered  before  a  satisfactory  analysis 
of  exchange  value  is  possible.  Marx  discovered  that  the 
homogeneous  element  which  enables  one  commodity  to 
command  another  in  exchange  is  the  quantity  of  labor 
which  such  a  commodity  contains.  Value,  accordingly, 
is  nothing  more  nor  less  than  the  quantity  of  crystallized 
human  exertion  which  a  commodity  possesses,  and  com- 
modities necessarily  differ  in  value  because  of  the  differ- 
ent quantities  of  human  labor  which  are  "  socially  neces- 
sary to  produce  them." 

It  follows  that  the  exchange  value  of  the  product  of 
any  particular  worker's  labor  will  be  the  equivalent  of 


The  Determination  of  Wages  83 

the  number  of  hours  required  to  produce  that  commodity. 
Now,  under  the  capitalistic  organization  of  industry  the 
employer  possesses  the  right  to  sell  the  finished  product 
or  the  raw  product  produced  by  labor,  and  usually  he  is 
able  to  dispose  of  that  product  at  its  real  value  or  the 
equivalent  of  the  number  of  hours  spent  in  its  production. 
Does  the  laborer  receive  the  full  value  of  his  product? 
Not  at  all.  Under  modern  capitalism  the  wages  of  labor 
are  determined  arbitrarily  by  the  employer  who  enjoys 
a  superior  advantage  in  bargaining,  so  that  the  laborer 
must  accept  what  the  capitalist-employer  is  willing  to 
pay  him  for  his  labor-power.  The  important  fact  here  is 
that  the  value  of  the  commodities  required  for  the  main- 
tenance of  labor  is  never  equivalent  to  the  value  of  the 
produce  of  labor  in  exchange.  Ordinarily  the  laborer  pro- 
duces more  than  the  value  of  the  commodities  which  he 
consumes.  Whereas  it  may  take  him  twelve  hours  to 
produce  a  certain  commodity,  under  modern  capitalism 
he  receives  the  equivalent  of  only  six  hours  of  labor. 
What  the  laborer  gets  in  wages  is,  therefore,  just  barely 
sufficient  to  guarantee  subsistence.  Under  modern  capi- 
talistic exploitation  wages  ever  tend  to  this  minimum  of 
subsistence.  What  becomes  of  the  surplus  value  created 
by  the  laborer  during  the  extra  six  hours!  The  capitalist 
appropriates  this  for  himself.  The  additional  hours  of 
exertion  required  for  the  creation  of  this  surplus  value 
Marx  calls  surplus  labor. 

The  Marxian  analysis  of  value  shows  clearly  that  it  is 
to  the  advantage  of  the  capitalist  to  increase  the  quantity 
of  surplus  value  because  this  augments  profits.  This 
can  be  accomplished  by:  (1)  prolonging  the  hours  of 
employment  as  much  as  possible,  or  (2)  decreasing  the 
amount  necessary  for  the  workers'  subsistence.  Improve- 
ment in  industrial  organization  and  operation,  or  a  de- 
crease in  the  cost  of  living  would  reduce  the  number  of 
hours  necessary  to  produce  the  workers'  sustenance. 
Labor  might  be  speeded  up ;  women,  children,  or  cheaper 
male  labor  might  be  employed,  thus  reducing  the  ex- 
pense of  production.  Another  method  would  be  the  estab- 


84  The  Determination  of  Wages 

lishment  of  charitable  institutions  to  feed  the  workers 
so  that  their  income  from  industry  would  be  supple- 
mented by  social  aid.  The  capitalist-employer,  who  is 
the  purchaser  of  labor-power,  must  pay  the  worker  a 
wage  equivalent  to  the  value  of  the  goods  which  the 
worker  consumes  while  exerting  his  labor-power,  plus 
an  amount  sufficient  to  enable  him  to  perpetuate  his  kind 
and  maintain  the  labor  supply.  It  is  not  difficult  to 
detect  in  the  Marxian  analysis  of  value  and  wages  the 
influence  of  the  earlier  economic  doctrines,  such  as  the 
cost  of  subsistence  theory  of  wages.  It  is  due  contem- 
porary socialists  to  say  that  the  theory  of  surplus  value 
and  surplus  labor  is  not  generally  regarded  as  an  essen- 
tial part  of  current  socialist  philosophy.  They  still  be- 
lieve in  the  facts  of  surplus  labor  and  surplus  value,  but 
the  Marxian  analysis  is  not  regarded  a  sufficient  explana- 
tion of  the  phenomena  of  value  and  wages.  The  Marxian 
concept  of  value  is  the  basis  of  the  Marxian  theory  of 
wages.  Marx's  theory  of  value  is  considered  untenable 
because  it  emphasizes  value  in  exchange  almost  to  the 
exclusion  of  value  in  use.  In  other  words,  it  recognizes 
as  important  only  the  supply  element  in  value,  and  neg- 
lects demand  as  a  factor  in  exchange  value.  Labor  is 
not  regarded  by  economists  as  the  sole  producer  of 
wealth.  Commodities  may  represent  an  enormous  expendi- 
ture of  human  energy  and  yet,  in  the  absence  of  an  effec- 
tive demand,  command  practically  no  price  on  the  market. 
Not  only  labor,  but  land,  capital,  and  the  directive  ability 
of  the  enterpriser  are  essential  factors  in  the  production 
of  commodities.  With  the  breakdown  of  the  Marxian 
theory  of  value,  the  socialist  explanation  of  wages  like- 
wise fails. 

Miscellaneous  Theories. — Besides  the  more  generally 
known  wage  theories  presented  already,  there  are  several 
other  explanations  that  deserve  consideration.  Among 
the  most  interesting  of  these  is  one  offered  by  Henry 
George  who  in  his  famous  work  "Progress  and  Poverty," 
published  in  1879,  contended  that  while  rents  go  up  in- 
terest goes  down  and  wages  fall  to  a  minimum.  Extreme 


The  Determination  of  Wages  85 

poverty  and  conspicuously  extravagant  luxury  are  mani- 
fest inconsistencies  of  the  present  economic  order.  Henry 
George  does  not  share  the  belief  of  the  socialists  that 
the  exploitation  of  labor  by  the  capitalist  causes  this 
inconsistency;  moreover,  it  cannot  be  attributed  to  over- 
population in  the  Malthusian  sense.  Rather  is  it  the  result 
of  rent,  made  possible  by  land  monopolization.  "In  every 
direction,  the  direct  tendency  of  civilization  is  to  increase 
the  power  of  human  labor  to  satisfy  human  desires — to 
extirpate  poverty  and  to  banish  want  and  the  fear  of 
want.  .  .  .  But  labor  cannot  reap  the  benefits  which  ad- 
vancing civilization  brings,  because  they  are  intercepted. 
Land  being  necessary  to  labor,  and  being  reduced  to 
private  ownership,  every  increase  in  the  productive  power 
of  labor  but  increases  rent — the  price  that  labor  must 
pay  for  the  opportunity  to  utilize  its  power;  and  thus 
all  the  advantages  gained  by  the  march  of  progress  go 
to  the  owners  of  land,  and  wages  do  not  increase. ' ' 6  The 
proportion  of  the  product  which  labor  and  capital  receive 
is  necessarily  less  because  of  land  monopolization.  That 
this  theory  fails  to  recognize  numerous  factors  influencing 
the  wages  of  labor  is  seen  from  the  preceding  discussion 
of  the  major  doctrines. 

In  his  " Wealth  and  Progress,"  published  in  1887, 
George  Gunton  advanced  the  theory  that  the  price  of 
commodities  and  services  is  determined  always  by  the 
cost  of  producing  the  most  expensive  unit,  and  the  price 
of  labor  constantly  tends  toward  the  cost  of  producing 
labor-power.  "Now,  what  constitutes  the  cost  of  labor 
to  its  owner,  the  laborer?  Obviously,  the  cost  of  his 
living."7  The  laborer  will  not  long  consent  to  dispose 
of  his  labor  for  less  than  it  cost  him,  that  is,  for  less 
than  will  afford  him  a  living.  His  cost  of  living  will 
be  determined  always  by  the  number  of  his  habitual  or 
socially  established  wants.  If  it  be  true  that  the  laborer 
will  not  sell  his  labor  for  less  than  it  cost  him,  it  is 
equally  true  that  he  cannot  for  any  considerable  time 

•  Progrett  and  Poverty,  Book  V,  Chap.  H,  p.  281, 
'  Wealth  and  Progreut,  p.  83, 


86  The  Determination  of  Wages 

sell  it  for  more  than  that  amount.  "Want  being  thus 
the  motive  and  measure  of  effort,  and  wages  the  price 
given  for  the  effort,  manifestly  the  laborer's  wage  can 
never  be  permanently  much  above  his  wants,  as  expressed 
in  the  standard  of  living. ' ' 8  The  worker  has  no  incentive 
to  work  beyond  the  requirements  of  his  wants,  and  if 
wages  are  advanced  to  a  point  beyond  these  require- 
ments, days  of  work  will  be  reduced  by  the  laborer.  Con- 
sequently, real  wages  move  always  toward  the  level  of 
wants  or  the  socially  accepted  standard  of  living,  which 
Gunton  defines  as  that  state  of  material  comfort  and 
social  refinement  which  prevails  in  the  class  to  which  one 
belongs  and  below  which  one  cannot  go  without  incurring 
social  disadvantage.  The  standard  of  living  of  a  single 
family,  and  not  of  an  individual,  is  always  referred  to. 

How  does  the  cost  of  living  determine  wages?  "In 
exactly  the  sense  that  the  cost  of  production  determines 
the  prices  of  commodities,  which,  it  will  be  remembered, 
is  by  the  cost  of  producing  the  most  expensive  portion 
of  the  necessary  supply.  There  we  say  the  chief  deter- 
mining influence  in  the  general  rate  of  wages  in  any 
country,  class  or  industry,  is  the  standard  of  living  of 
the  most  expensive  families  furnishing  a  necessary  part 
of  the  supply  of  labor  in  that  country,  class,  or  indus- 
try."9 The  cost  of  living  is  the  resultant  of  two  forces: 
the  price  of  commodities  which  the  worker  consumes,  and 
the  quantity  of  commodities  which  enter  into  his  habitual 
daily  consumption. 

Gunton 's  theory  is  essentially  a  cost  of  subsistence 
theory,  and  is  open  to  the  criticism  which  was  made 
of  its  predecessors;  namely,  it  is  based  entirely  upon 
the  supply  price  of  labor.  Aside  from  its  failure  to  recog- 
nize a  demand  price  of  labor,  there  appears  no  founda- 
tion in  fact  for  believing  that  the  wages  of  labor  tend 
to  equal  the  cost  of  living  of  the  most  expensive  families 
furnishing  a  necessary  part  of  the  labor  supply  in  a 
given  class,  industry,  or  country.  Indeed,  there  is  more 

•Ibid.,  p.  85. 
'Ibid.,  p.  89. 


The  Determination  of  Wages  87 

i 

reason  for  contending  that  under  conditions  of  the  modern 
wage  bargain  wages  tend  towards  the  minimum  cost  of 
subsistence  for  the  least  expensive  families  in  a  given 
labor  supply,  although  this  also  does  not  coincide  with 
the  facts. 

Professor  F.  W.  Taussig  contends  that,  generally  speak- 
ing, wages  are  determined  by  the  discounted  marginal 
product  of  labor.  The  laborer  must  accept  what  can  be 
paid  him  by  the  marginal  landowner  or  competitive  pro- 
ducer who  employs  land  or  capital  in  the  least  efficient 
manner.  The  idea  of  a  discount  always  implies  an  ad- 
vance. Production  takes  time;  the  materials  and  ma- 
chinery needed  in  a  time-consuming  process  are  made 
by  laborers.  Here  a  difficulty  develops.  On  account  of 
the  unequal  distribution  of  wealth  the  vast  majority  of 
workers  are  unable  to  support  themselves  during  tho 
prolonged  period  of  production,  and  are  forced  to  depend 
upon  those  who  have  a  surplus  to  advance  them  the  neces- 
sary remuneration.  Successive  advances  are  made  by, 
capitalists  to  the  workers,  and  the  capitalist  class  secures 
its  gains  by  advancing  to  the  laborers  less  than  they 
ultimately  produce.  That  is,  the  product  of  labor  is  dis- 
counted by  the  capitalist-employers.  Thus  labor  is  a 
"future"  good  and  is  the  means  by  which  "present" 
goods  are  eventually  procured.  The  essence  of  the 
generally  accepted  theory  of  interest  is  that  present  goods 
are  preferred  to  future  goods;  that  present  means,  or 
sources  of  satisfaction  in  hand,  will  not  be  exchanged  at 
par  value  for  sources  of  satisfaction  that  are  to  ma- 
terialize in  the  future.  A  discount  takes  place  and  a' 
premium  is  demanded  for  the  use  of  present  satisfactions. 
According  to  Professor  Taussig,  the  theory  of  wages  ft 
strictly  consistent  with  this  theory  of  interest.  The  laborer 
cannot  be  paid  as  much  as  the  product  will  sell  for ;  other- 
wise the  employer  and  owner  of  capital  will  have  to 
forego  compensation. 

The  more  effective  the  competition  among  capitalist- 
employers  the  more  the  wages  of  labor  tend  to  ap- 
proximate the  future  product;  conversely,  the  keener 


88  The  Determination  of  Wages 

the  competition  among  laborers  the  less  will  be  this  ap- 
proximation. Professor  Taussig  agrees  that  there  is 
doubtless  a  lessening  of  the  range  of  competition  in 
modern  times,  thus  resulting  in  a  wider  divergence  be- 
tween wages  and  the  total  discountable  product  of  labor. 
Moreover,  increasing  concentration  in  the  control  of  capital 
and  the  development  of  combination  and  monopoly  sug- 
gest the  possibility  of  the  complete  disappearance  of  com- 
petition. He  adds,  however,  that  in  all  probability  the 
major  part  of  modern  industrial  activities  are  conducted 
under  leveling  conditions  of  competition,  and  that  there 
is  an  approximation  of  wages,  by  way  of  discount,  to 
the  product  of  the  marginal  laborer.  "An  all-embracing 
and  considerable  advance  [in  wages]  can  come,  under 
the  regime  of  private  property,  only  if  productivity  is 
increased,  if  the  margin  is  keyed  up,  if  the  discount  is 
narrowed  by  the  accumulation  and  competition  of  capital. 
Everything  that  raises  the  productive  margin,  that  lessens 
the  rate  of  discounting,  tends  to  raise  wages;  and  in  the 
last  resort  it  is  only  in  these  ways  that  a  general  advance 
can  be  brought  about. ' ' 10  No  one  will  deny  that  the 
productivity  of  labor  is  a  factor  in  the  determination 
of  the  general  wage  rate.  There  is  a  maximum  beyond 
which  wages  cannot  go ;  that  maximum  is  determined  by 
the  utility  of  the  product  to  the  consumer.  But  to  state 
that  marginal  productivity  is  the  only  determinant  of 
increased  wages,  is  to  emphasize  the  element  of  demand 
for  labor  to  the  neglect  of  numerous  conditions  that  in- 
fluence supply.  This  is  the  common  mistake  of  all  pro- 
ductivity theories. 

In  his  book,  "The  Industrial  System,"  published  in 
1910,  John  A.  Hobson  advances  the  theory  that  the  usual 
minimum  price  of  labor-power  is  a  sum  of  money  sufficient 
to  maintain  the  worker  in  the  working  efficiency  required, 
and  to  rear  a  family  which  will  keep  up  the  supply  of 
necessary  labor-power.  It  is  quite  possible,  however,  for 
wages  to  fall  for  a  time  indefinitely  below  this  cost  of 

*P.  W.  Taussig,  Principles  of  Economics,  1917  ed.,  Vol.  II,  Chap. 
LI,  p.  207. 


The  Determination  of  Wages  89 

subsistence  or  " ordinary  maintenance"  level.  Excessive 
supply  of  labor  may  cause  this.  This  minimum  wage  is 
not  one  of  full  maintenance  and  replacement;  it  may 
enable  the  worker  to  continue  his  labor  for  a  time,  but 
it  is  not  sufficient  to  allow  him  to  live  his  full  life  or 
to  bring  up  a  family.  Supplementary  earnings  of  other 
wage-earners  in  the  ordinary  family  make  up  the  true 
maintenance  wage.  In  reality,  the  only  economically 
necessary  wage  is  the  family  wage,  and  when  employment 
is  available  for  husband,  wife,  and  children  there  is  no 
assurance  that  each  will  earn  a  maintenance  wage.  The 
price  of  any  sort  of  labor-power,  then,  must  be  such  as 
to  enable  the  worker  to  provide  such  a  proportion  of  the 
family  maintenance  as  the  conditions  of  local  employment 
impose  upon  him,  as  a  member  of  the  family.  "While, 
therefore,  the  'minimum'  in  modern  industry  is  not  the 
physical  subsistence  minimum  of  the  older  doctrine,  it 
none  the  less  remains  true  that  the  conditions  of  the 
sale  of  labor-power  are  normally  such  as  to  keep  the 
price  down  to  the  point  of  marginal  costs  of  production, 
that  is  the  conventional  standard  of  comfort  of  the  worst 
labor  in  each  grade."11 

As  to  the  differences  in  wages  among  different  grades 
of  labor,  Hobson  states  that  the  most  powerful  deter- 
minant is  the  degree  of  skill  and  knowledge  required  to 
secure  regular  employment  in  a  trade  or  profession,  or, 
more  accurately,  the  difficulty  of  acquiring  this  knowledge 
and  skill.  Other  factors  that  influence  the  wage  level 
include  possession  and  discovery  of  natural  aptitudes, 
foresight,  cost  of  preparation,  personal  connections,  social 
opportunities,  mobility  of  labor,  trade  organization,  and 
excessive  demand  for  labor.  Labor  may  procure  a  "sur- 
plus gain"  when  an  excessive  demand  for  labor  or  a  labor 
shortage  or  some  other  condition  enables  the  workers 
to  drive  an  effective  bargain.  Whatever  tends  to  create 
a  scarcity  of  laborers  enhances  this  surplus;  whatever 
tends  to  diminish  the  demand  for  laborers  tends  to 
eliminate  this  gain.  In  this  theory  again  there  is  a  large 

*  J.  A.  Hobaon,  The  Industrial  Syttem,  p.  90, 


90  The  Determination  of  Wages 

element  of  truth,  but  like  all  the  others  it  offers  a  par- 
ticularistic explanation,  emphasizing  one  determinant  al- 
most to  the  exclusion  of  other  important  determinants. 
The  cost  of  subsistence  minimum,  no  matter  how  liberally 
it  may  be  interpreted,  explains  but  one  side  of  the  ex- 
change equation,  and  while  Hobson's  theory  recognizes 
other  forces  its  major  emphasis  is  upon  that  minimum, 
or  the  supply  price  of  labor. 

Economists  have  yet  to  formulate  a  theoretically  sound 
and  applicable  concept  of  wage  determination.  In  all 
the  theories  reviewed  there  are  some  common  elements, 
noticeably  the  cost  of  subsistence  and  the  utility  of  the 
product  of  labor.  Recognition  of  these  two  important 
factors  has  led  to  the  formulation  of  the  utility-standard 
of  living  theory  of  wages.  According  to  this  theory, 
which  seems  to  be  the  most  acceptable,  the  wages  of  labor 
cannot  exceed  the  productivity  of  labor,  and  cannot  re- 
main below  the  minimum  requirements  of  the  accepted 
standard  of  living  for  any  particular  group.  The  upper 
limit  depends  upon  the  utility  that  goods  have  for  con- 
sumers. The  degree  of  utility  determines  what  consumers 
will  pay  for  these  goods,  and  influences  the  judgment  of 
the  employer  as  to  what  he  can  afford  to  pay  for  the 
labor-power  required  to  produce  such  commodities.  The 
lower  limit  is  not  a  fixed  minimum.  It  has  been  shown 
already  that  the  standard  of  living  is  a  variable,  elastic 
thing.12  The  element  of  truth  in  all  cost  of  subsistence 
theories  is  that  there  obtains  a  minimum  of  physical 
requirements  which  the  wages  of  labor  must  furnish,  if 
the  efficiency  of  the  laboring  force  and  the  necessary 
supply  of  labor  are  to  be  maintained.  Both  under  an 
individualistic  and  under  a  collectivistic  form  of  society  this 
minimum  must  be  guaranteed.  The  wages  of  labor  may 
fall  temporarily  below  the  generally  accepted  minimum 
but  cannot  long  remain  there.  Similarly,  wages  may  go 
temporarily  above  the  utility  level,  but  cannot  long  re- 
main there.  Between  the  maximum  level  of  the  utility 
of  the  goods  to  the  consumer  and  the  generally  accepted 

u  See  Chap.  IV, 


The  Determination  of  Wages  91 

standard  of  living,  the  wages  of  any  group  will  depend 
upon  numerous  determinants,  such  as  the  comparative 
bargaining  strength  of  the  buyers  and  sellers  of  labor — 
employers  and  laborers.  Bargaining  power,  in  turn,  is 
influenced  by  such  conditions  as  the  degree  of  mobility 
of  capital  and  labor,  the  status  of  organization,  knowledge 
of  the  labor  market,  the  possession  of  surplus  wealth 
which  enables  the  bargainer  to  wait,  the  demand  for 
labor  and  the  supply  of  labor,  and  the  adaptability  of 
the  worker  to  specific  tasks.  This  theory  assumes  no 
equality  or  approximate  equality  of  bargaining  power, 
and  recognizes  frankly  the  multiplicity  of  forces  that  enter 
into  wage  determination,  both  in  industries  in  which  the 
workers  are  organized  and  bargain  collectively,  and  in 
those  where  individual  bargaining  is  still  the  rule. 

The  Peculiar  Characteristics  of  the  Labor  Supply. — In 
almost  all  of  the  wage  theories  that  have  been  considered, 
there  is  an  expressed  or  a  tacit  recognition  of  the  com- 
modity aspects  of  labor.  Labor  is  commonly  spoken  of 
as  though  it  were  a  commodity  like  all  other  commodities, 
its  exchange  value  being  determined  by  forces  similar  to 
those  that  determine  the  selling  price  of  goods  on  the 
general  commodity  market.  The  conception  that  labor 
is  a  commodity  is  not  only  erroneous,  but  is  partly  respon- 
sible for  the  failure  to  evaluate  properly  the  human  ele- 
ment in  production  and  for  the  resultant  conflict  of  indus- 
trial interests.  There  is  no  more  urgent  need  in  the 
philosophy  of  industrial  relations  than  to  disabuse  the 
mind  of  the  notion  that  labor  is  a  marketable  product 
exactly  like  all  other  products. 

Under  the  wage  system,  as  under  slavery,  serfdom,  and 
indentured  service,  the  tendency  to  depcrsonify  the  labor- 
ing class  has  been  all  too  common.  Labor  has  been  re- 
garded as  an  abstract  quantity,  a  purchasable,  impersonal 
commodity,  an  item  in  the  cost  of  production,  rather  than 
as  the  great  mass  of  human  beings  whose  efforts  are 
largely  responsible  for  the  creation  of  those  economic 
goods  and  utilities  that  satisfy  the  world's  needs.  Viewed 
as  a  marketable  product  devoid  of  personality,  it  is  nat- 


92  The  Determination  of  Wages 

ural  to  declare  that  the  price  of  labor,  like  the  price 
of  any  other  commodity,  is  determined  by  the  cost  of 
production  plus  a  variable  surplus  that  may  arise  because 
of  extreme  scarcity  of  supply.  Thus  labor  must  have  its' 
normal  price  which  covers  the  cost  of  maintaining  the 
necessary  supply,  and  may  have,  if  market  conditions  are 
favorable,  a  market  price  which  affords  a  quasi-rent  or 
differential  gain. 

Persons  who  regard  labor  as  a  commodity  similar  to  all 
other  commodities  fail  to  recognize  the  numerous  peculiari- 
ties that  characterize  the  labor  supply.  This  much  may  be 
granted:  Labor  is  like  all  other  commodities  in  that  the 
services  of  labor  are  bought  and  sold  and  command  a  price 
on  the  market.  To  say  that  labor  resembles  a  commodity 
is  not  identical  with  stating  that  it  is  a  commodity.  The 
peculiar  characteristics  of  the  labor  supply  that  differen- 
tiate it  from  the  supply  of  marketable  commodities  may 
be  summarized  as  follows: 

1.  The  labor  that  is  bought  and  sold  is  inseparable  from 
the  personality  of  the  laborer.     In  buying  raw  material 
to  be  used  in  manufacturing,  the  capitalist-employer  pro- 
cures complete   ownership  and  control;  it  becomes  his 
private  property  which  he  can  dispose  of  as  he  chooses; 
but  when  he  purchases  labor  he  does  not  secure  title 
to  the  laborer,  as  the  master  did  under  slavery.    He  bar- 
gains for  the  services  of  the  laborer  but  these  cannot 
be  divorced  from  the  worker.    And  when  the  worker  sells 
his  labor-power  he  does  not  relinquish  ownership  of  him- 
self. 

2.  Unlike  the  sale  of  commodities,  the  seller  of  labor 
must  accompany  the  commodity  in  delivery.    The  future 
use  or  abuse  of  a  commodity  is  of  no  concern  to  the 
seller,  once  the  bargain  is  closed;  the  future  destination 
of  labor  is  of  serious  concern  to  the  worker,  since  he 
himself  is  the  labor-power  sold.     Satisfactory  conditions 
of  employment  mean  much  to  the  worker,  so  he  is  vitally 
interested  in  the  circumstances  under  which  his  labor- 
power  is  to  be  applied. 

3.  Commodities  and  the  various  forms  of  capital  goods 


The  Determination  of  Wages  93 

are  characterized  by  a  relatively  advantageous  degree  of 
mobility;  they  flow  easily  from  place  to  place  and  from 
person  to  person.  The  mobility  of  labor  is  synonymous 
with  the  mobility  of  the  laborer,  and  is  limited  by  many 
conditions,  such  as  unwillingness  to  break  away  from 
home  and  family  ties,  inertia,  financial  incapacity  to  de- 
fray the  cost  of  transportation  and  moving,  ignorance  of 
occupational  opportunities,  and  lack  of  adaptability  to 
industrial  vacancies. 

4.  Labor  has  a  high  degree  of  perishability  and,  conse- 
quently, must  often  be  sold  under  special  disadvantages. 
Commodities  are  frequently  perishable,   but  the   conse- 
quences of  forced  sale  are  not  likely  to  be  so  deleterious 
as  in  the  case  of  labor.    The  sellers  of  labor  are  usually, 
poor,  possessing  no  reserve  fund  which  would  enable  them 
to  withhold  their  labor-power  from  the  market.     Unem- 
ployment means  permanent  loss  of  work,  since  idle  days 
cannot  be  recovered.    Except  under  extraordinary  condi- 
tions the  seller  of  commodities  can  withhold  his  product 
from  the  market  in  the  hope  of  a  more  favorable  ex- 
change.   Labor  cannot  wait.    The  great  mass  of  unskilled 
workers  possess  no  surplus  that  permits  holding  out  for 
a  more  favorable  market.    Excessive  competition  among 
them  forces  wages  down  to  the  minimum  and  allows 
very  little  chance  for  the  accumulation  of  a  surplus.    Loss 
of  work  often  means  malnutrition  and  loss  of  efficiency, 
which  in  turn  disqualify  them  for  the  better  opportuni- 
ties in  industry  and  depress  their  wage  level.    In  the  case 
of  commodities,  cold  storage  facilities  are  making  it  more 
and  more  unnecessary  to  sell  otherwise  perishable  goods 
at  forced  sale.    The  quantity  and  quality  of  labor  cannot 
be  thus  conserved. 

5.  Replacement  of  labor  is  necessarily  a  slow  process. 
As  capital  goods  depreciate  and  wear  out  it  is  a  com- 
paratively easy  matter  to  replace  them;   production   of 
such  goods  is  rapid.    Replacement  of  labor  is  a  far  more 
difficult  and  a  much  slower  process.     The  prolongation 
of  infancy  in  the  human  species  is  a  stern  fact  that  renders 
spontaneous  restoration  of  the  labor  supply  impossible. 


94  The  Determination  of  Wages 

6.  Unlike  a  commodity,  labor  is  not  a  passive  thing. 
The  essential  fact  about  labor  is  that  it  is  human.  Labor- 
power  is  inseparable  from  the  personality  of  the  laborer, 
and  that  personality  is  a  complex  of  instincts,  impulses, 
passions,  and  motives.  Labor  resists  an  unfavorable 
market  whenever  it  is  possible.  A  forced  sale  is  resented 
and  arouses  antagonistic  impulses  that  have  far-reaching 
industrial  and  social  consequences.  In  the  labor  supply, 
then,  numerous  determinants  are  operative  that  have  little 
or  no  counterpart  in  the  supply  of  commodities,  and  to 
subject  the  sale  of  labor  to  ruthless  competitive  condi- 
tions, although  it  may  be  economically  plausible,  cannot 
be  viewed  as  economically  sound  and  socially  beneficial. 

The  Wage  Bargain. — Under  the  competitive  conditions 
which  still  characterize  the  bargaining  process  in  most 
of  the  world's  industries,  the  employer  enjoys  a  differen- 
tial advantage.  The  more  advantageous  position  of  the 
employing  group  arises  from  certain  conditions,  some  of 
which  have  been  suggested  already  in  considering  the 
commodity  theory  of  labor.  They  include:  (1)  the  su- 
perior knowledge  and  bargaining  skill  of  the  employer; 
(2)  the  inability  of  the  laborer  to  wait  for  a  more  favor- 
able market;  (3)  the  intimate  relation  of  a  job  to  the 
very  existence  of  the  worker,  which  means  that  the  laborer 
has  more  at  stake  than  has  the  employer  who  stands 
merely  to  lose  profits;  and  (4)  the  tendency  of  the  bar- 
gaining power  of  any  group  of  laborers  to  be  determined 
by  the  bargaining  power  of  its  weakest  members. 

Other  factors  influencing  the  wage  bargain  are  those 
which  develop  from  the  relative  abundance  or  scarcity 
of  the  labor  supply.  Under  machine  processes  of  modern 
industry  there  is  a  tendency  to  increase,  relatively  and 
absolutely,  the  number  of  semiskilled  and  unskilled 
workers.  Machine  industry,  with  specialization  of  tasks, 
is  rendering  unnecessary  prolonged  periods  of  apprentice* 
ship,  and  is  breaking  down  the  monopoly  once  possessed 
by  skilled  workers.  There  is  always  an  actual  or  a 
potential  labor  reserve  which  tends  to  intensify  competi- 
tion among  the  workers,  particularly  the  unskilled.  This 


The  Determination  of  Wages  05 

actual  or  potential  oversupply  of  labor  weakens  greatly 
the  bargaining  strength  of  the  workers  and  depresses  the 
wage  scale.  In  order  to  eliminate  inequality  of  bargaining 
under  competitive  conditions,  labor  organizations  emerge 
to  stop  competition  between  the  workers  and  substitute 
collective  for  individual  bargaining.  Since  collective  bar- 
gaining is  still  the  exception  and  individual  bargaining 
the  rule,  the  majority  of  workers  continue  to  make  the 
wage  bargain  under  the  unequal  and  disastrous  conditions 
of  competition. 

Conclusions. — Theories  concerning  the  determination  of 
labor's  share  in  the  net  product  of  industry  have  been 
formulated  and  expressed  in  numerous  wage  doctrines. 
In  these  doctrines  the  cost  of  living  and  the  utility  and 
productivity  of  labor  stand  out  as  the  minimum  and 
maximum  limits,  respectively,  between  which  wages  may 
fluctuate  as  the  result  of  the  operation  of  numerous  forces. 
These  limits  are  variables.  As  yet  no  satisfactory  and 
generally  acceptable  theory  of  wages  has  been  formu- 
lated, but  there  is  a  definite  relation  between  wages  and 
the  limits  set  by  the  minimum  requirements  for  subsistence 
and  the  productivity  of  labor.  Somewhere  between  these 
two  limits  the  wage  is  fixed  by  the  relative  bargaining 
strength  of  the  employer  and  the  employee.  Under  com- 
petitive conditions  this  bargaining  strength  is  unequal, 
the  employer  enjoying  a  differential  advantage;  but 
collective  bargaining  promises  ultimately  to  introduce 
greater  equality.  Much  of  the  misapprehension  as  to 
the  nature  of  a  reasonable  wage  will  disappear  when  the 
humanity  concept  replaces  the  commodity  concept  of 
labor. 

SELECTED  REFERENCES 

CARVER,  T.  N.,  The  Distribution  of  Wealth,  1904,  Chap.  IV. 
CLARK,  J.  B.,  Essentials  of  Economic  Theory,  1907,  Chap.  VIII. 
DAVIDSON,  JOHN,  The  Bargain  Theory  of  Wages,  1898,  Chap.  IV. 
ELY,  R.  T.,  Outlines  of  Economics,  third  revised  edition,  1918, 

Chap.  XXI. 
FETTER,  P.  A.,  The  Principles  of  Economics,  1904,  Chap.  XXIII. 


96  The  Determination  of  Wages 

GIDE,    CHARLES,   Political   Economy,   1920,   Bk.    Ill,   Part    II, 

Chap.  III. 

GUNTON,  GEO.,  Wealth  and  Progress,  1891,  Chaps.  II  and  IX. 
HOBSON,  J.   A.,   The  Industrial  System,  revised  edition,  1910, 

Chap.  V,  and  Appendix. 
MACFARLANE,  C.  W.,  Value  and  Distribution,  second  edition,  1900, 

Bk.  IV,  Chap.  V. 
MARSHALL,  ALFRED,  Principles  of  Economics,  sixth  edition,  1910, 

Vol.  I,  Chaps.  IV  and  VI. 

SCHOENHOF,  JACOB,  The  Economy  of  High  Wages,  1893,  Part  I. 
SEAGER,  H.  R.,  Principles  of  Economics,  second  edition,  1917, 

Chap.  XV. 
SELIGMAN,  E.  R.  A.,  Principks  of  Economics,  seventh  edition, 

1916,  Chap.  XXVI. 
TAUSSIG,  F.  W.,  Principles  of  Economics,  second  edition,  1917, 

Vol.  II,  Chaps.  XLVII,  XLVIII  and  LI. 
WALKER,  F.  A.,  The  Wages  Question,  1891. 


CHAPTER  VII 
HOURS  OF  LABOR 

The  Nature  of  the  Problem. — Robert  Owen,  the  famous 
English  employer-reformer,  once  wrote:  "We  manufac- 
turers are  always  perfecting  our  dead  machinery,  but  of 
our  living  machinery  we  are  taking  no  care."  He  re- 
ferred chiefly  to  the  long  working-day  and  its  effects  upon 
the  workers.  For  over  a  century  excessive  hours  of  em- 
ployment have  been  recognized  as  a  serious  problem. 
Under  modern  industrialism  with  its  machine  processes, 
large-scale  production,  and  world  markets,  the  problem 
of  hours  of  labor,  like  many  other  problems  in  industry, 
has  assumed  a  serious  character.  Early  reformers  saw 
the  problem  in  its  social  and  moral  implications  rather 
than  in  its  economic  aspects.  There  was  little  or  no  recog- 
nition of  the  possible  relation  that  might  obtain  between 
the  length  of  the  working-day  and  output.  Not  until  the 
latter  part  of  the  nineteenth  century  did  the  economic 
phases  of  the  problem  begin  to  receive  thoughtful  con- 
sideration. 

On  its  social  side  the  problem  of  hours  of  labor  involves 
such  elements  as  the  enjoyment  of  adequate  sleep  and 
rest,  health,  recreation,  social  life,  educational  opportuni- 
ties, and  domestic  life,  or,  in  other  words,  the  opportunity 
to  discharge  the  ordinary  duties  of  citizenship  and  tho 
development  of  those  normal  tendencies  that  characterize 
the  average  individual  in  an  enlightened  and  progressive 
society.  On  its  economic  side  the  problem  involves  the 
relation  of  hours  of  employment  to  efficiency  and  output. 
The  problem  does  not  involve  merely  the  length  of  the 
working-day,  but  also  overtime,  continuous  operations, 
rest  periods,  and  night  work. 

97 


98  Hours  of  Labor 

Development  of  the  Problem  in  England. — Excessive 
hours  of  employment  for  children,  adolescents,  and  women 
first  commanded  the  attention  of  reformers  in  England 
in  the  early  part  of  the  nineteenth  century,  but  excessive 
hours  of  labor  for  men  workers  were  hardly  noticed.  The 
textile  industries  first  received  consideration  in  the  mat- 
ter of  hours,  and  the  inclusion  of  other  industries  was 
not  achieved  until  restriction  of  hours  had  practically 
gained  its  present  status.  Conditions  with  regard  to 
hours  of  labor  for  young  persons  were  so  undesirable  that 
in  1802  the  Health  and  Morals  of  Apprentices  Act,  which 
dealt  solely  with  apprentices,  was  passed.  The  work-day 
of  apprentices  was  limited  to  12  hours  under  this  act,  and 
their  employment  was  prohibited  between  the  hours  of 
9  p.  m.  and  6  a.  m.  This  initial  act  was  a  failure  because 
it  was  not  enforceable  and  did  not  include  the  large  number 
of  children  who,  not  being  apprentices,  were  generally 
exploited.  Under  the  leadership  of  Robert  Owen,  re- 
formers secured  the  passage  of  a  new  act  in  1819,  which 
limited  the  work-day  for  young  persons  between  the  ages 
of  ten  and  sixteen  to  12  hours.  Owen,  who  was  a  cotton 
manufacturer,  stated  in  his  testimony  that  the  reduction 
of  hours  in  his  own  factory  had  not  appreciably  affected 
the  output.  Between  1819  and  1830  there  were  few 
changes  of  importance  in  the  hours  of  employment.  A 
new  movement  sprang  up,  however,  which  had  as  its 
objective  the  10-hour  day  for  juvenile  workers.  Opposi- 
tion to  the  10-hour  day  was  based  upon  the  contention 
that  such  restriction  of  hours  would  impede  the  industrial 
prosperity  of  the  nation.  "The  longer  the  hours,  the 
greater  the  profit,"  was  the  motto  that  persisted  in  Eng- 
land down  to  1844,  and  even  'yet  constitutes  the  stock 
phrase  of  the  selfish  employer. 

An  investigation  made  in  1833  showed  clearly  that  chil- 
dren engaged  in  the  principal  manufacturing  industries 
were  working  the  same  number  of  hours  as  men  and  that, 
moreover,  these  excessive  hours  frequently  resulted  in 
physical  deterioration  and  irremediable  diseases.  Chil- 
dren were  helpless  to  improve  their  conditions.  The 


Hours  of  Labor  90 

commissioners  who  made  the  investigation  were  convinced 
that  excessive  hours  were  uneconomical  and  that  addi- 
tional legislation  was  necessary.  In  response  to  the  recom- 
mendations of  this  committee  the  Factory  Act  of  1833 
was  passed,  in  accordance  with  which,  for  the  first  time, 
a  distinction  was  made  between  children  and  young 
people.  Under  the  provisions  of  this  act  children  between 
the  ages  of  nine  and  thirteen  were  to  be  employed  for 
not  more  than  9  hours  a  day  and  48  hours  a  week,  while 
young  persons  between  the  ages  of  thirteen  and  eighteen 
could  be  employed  for  12  hours  a  day.  Employment  of 
persons  under  eighteen  years  of  age  at  night — between 
8 :30  p.  m.  and  5 :30  a.  m. — was  prohibited.  A  medical 
certificate  was  required,  showing  that  each  child  of  nine 
years  who  was  employed  possessed  "the  ordinary  strength 
and  appearance."  Factory  inspectors  were  appointed  to 
enforce  the  law,  a  measure  designed  to  do  away  with  the 
incompetent  system  of  enforcement  that  had  prevailed 
under  the  local  justices. 

The  Factory  Act  of  1844  was  a  further  attempt  to  solve 
the  problem  of  hours  of  labor.  This  act,  supported  by 
employers  and  employees,  provided  for  efficient  enforce- 
ment of  the  restrictions  already  imposed,  prevention  of 
encroachment  upon  meal  periods,  and  the  limitation  of 
hours  of  labor  for  women  to  the  number  already  deter- 
mined for  young  persons.  No  action  was  taken  in  behalf 
of  men.  With  regard  to  women  workers  it  was  pointed 
out  that  "the  case  ...  is  very  different  .  .  .;  for  not 
only  are  they  less  free  agents,  but  they  are  physically 
incapable  of  bearing  a  continuance  of  work  for  the  same 
length  of  time  as  men,  and  deterioration  of  their  health 
is  attended  with  far  more  serious  consequences  to 
society."1 

In  1847  and  1850  laws  were  passed  which  practically; 
ended  the  struggle  for  the  10-hour  day.  These  acts  pro- 
vided that  the  hours  of  labor  for  women  and  young  per- 

1  Quoted  in  the  Final  Report  of  the  British  Health  of  Munition 
Worker*'  Committee,  U.  8.  Bureau  of  Labor  Statistics,  Bulletin  No. 
249,  p.  21. 


100  Hours  of  Labor 

sons  should  not  exceed  Wy2  a  day  with  iy2  hours  for 
meals,  and  60  hours  a  week.  The  legal  working-day  was 
set  between  6  a.  m.  and  6  p.  m.  In  1843  appeared  the 
second  report  of  the  commission  that  had  been  appointed 
in  1840  to  investigate  industrial  conditions  in  industries 
other  than  textile  ones.  The  evidence  was  conclusive  to 
the  effect  that  in  metal  ware  and  other  industries  children 
were  generally  employed  for  a  work-day  as  long  as  that 
of  adults,  sometimes  for  a  period  of  from  16  to  18  hours 
without  intermission.  Night  work  made  the  problem  more 
serious.  Legislation  was  recommended  and  secured  for 
coal  mines  and  for  textile  industries  not  already  included, 
but  nothing  was  done  in  the  case  of  metal  ware  and  other 
nontextile  trades. 

In  1862  a  second  commission  was  appointed  to  investi- 
gate conditions  of  employment  for  children.  Much  of  the 
opposition  to  the  shorter  work-day  had  passed  away. 
Power  machinery  was  being  introduced  rapidly,  and  this 
revolutionized  the  demand  for  labor.  Overtime  was  ac- 
cepted as  applying  to  hours  of  labor  in  excess  of  the 
ordinary  day's  work,  and  in  industries  having  continuous 
processes  regular  day  and  night  shifts  were  introduced. 
The  commission  recommended  that  the  metal  trades  be 
included  in  the  provisions  of  the  factory  act.  A  law  to 
this  effect  was  passed  in  1867,  which  also  prohibited  Sun- 
day work,  and  night  work  except  to  a  limited  extent  for 
male  workers  in  mills  and  blast  furnaces.  Overtime  was 
forbidden  in  the  metal  industries.  In  1876  there  was 
published  the  report  of  the  commission  appointed  to  in- 
vestigate the  operation  of  the  factory  and  workshop  acts 
with  a  view  to  their  consolidation  and  amendment.  No 
change  in  limitations  was  recommended.  The  Factory 
and  Workshop  Act  of  1901  provided  chiefly  for  the  con- 
solidation of  existing  laws  on  hours.  In  1911  a  departmental 
committee  was  appointed  to  investigate  the  night  employ- 
ment of  male  young  persons  in  workshops  and  factories. 
The  report  of  this  committee  recommended  the  prohibition 
of  all  night  work  in  blast  furnaces  for  boys  under 
eighteen  years  of  age,  and  in  iron  mills  for  boys  under 


Hours  of  Labor  101 

sixteen  years  of  age.  It  also  recommended  a  periodical 
medical  examination  of  boys  under  eighteen  years  of  age 
who  were  employed  at  night. 

Investigations  of  the  problem  of  hours  of  labor  in  the 
United  Kingdom  show  that  it  is  necessary  to  limit  the 
hours  of  employment  in  order  to  prevent  overstrain  of 
the  employees,  conserve  the  national  health,  and  promote 
general  social  and  industrial  welfare  and  progress.  For 
over  a  century  the  state  has  accumulated  evidence  to  the 
effect  that  conditions  of  employment,  particularly  the 
length  of  the  working-day,  are  largely  responsible  for 
physical  deterioration  of  the  workers.  "Apart  from  ex- 
ceptional occupations  which  are  in  themselves  injurious, 
the  principal  of  the  undesirable  conditions,  the  most 
radical  and  persistent,  the  commonest,  is  that  of  long 
hours.  It  is  a  significant  fact  that  all  through  the  history 
of  the  industrial  system  of  this  country  the  dominant 
evil  is  not  accidents  or  poisoning  or  specific  disease,  but 
the  stress  and  fatigue  due  to  long  and  unsuitable  hours 
of  labor,  entailing  inadequate  opportunities  tor  rest, 
recreation  and  nourishment.  In  a  word,  it  is  not  work 
but  the  continuity  of  the  work  which  kills."2 

Development  of  the  Problem  in  the  United  States. — In 
the  United  States,  as  in  England,  the  problem  of  hours 
of  labor  first  attracted  attention  in  connection  with  the 
employment  of  children.  In  1842  a  petition  was  received 
by  the  state  legislature  of  Massachusetts  from  a  body  of 
citizens  of  Fall  River,  which  stated  that  the  prevailing 
hours  of  labor  were  permanently  injurious  to  the  health 
of  the  child  workers  and  retarded  their  education.  Pro- 
hibitory legislation  was  asked,  and  as  a  result  there  was 
enacted  in  the  same  year  a  10-hour  law  for  children 
under  twelve  years  of  age,  in  manufacturing  establish- 
ments. The  work-day  for  children  under  fourteen  years 
of  age  in  cotton  and  woolen  mills  was  likewise  shortened 
to  10  hours  in  the  state  of  Connecticut.  Several  other 
states  took  up  the  problem  and  passed  legislation,  but 
many  of  the  early  laws  were  not  enforced  successfully. 

•Ibid.,  pp.  23,  24. 


102  Hours  of  Labor 

'Adult  workers  supported  the  shorter  work-day  for  chil- 
dren, with  the  hope  that  such  a  movement  would  have 
a  favorable  effect  on  their  own  hours.  Protection  of  the 
health  of  the  child  worker,  however,  became  the  dominant 
motive  behind  the  agitation  for  a  reduction  in  the 
hours  of  work  for  children.  The  8-hour  day  for  child 
workers  did  not  become  common  in  important  industrial 
states  until  the  early  years  of  the  present  century.  Op- 
position to  the  movement  on  the  part  of  employers  has 
been  based  upon  the  contention  that  competition  with 
backward  states  not  having  such  laws  would  be  dis- 
astrous. 

Excessive  hours  of  employment  for  women  workers 
received  attention  in  this  country  as  early  as  the  thirties, 
when  the  problem  became  so  acute  that  strong  protests 
were  made.  The  12-hour  day  so  prevalent  in  large 
textile  factories  was  condemned  as  undesirable  and  in- 
jurious. In  some  cases  the  work-day  was  even  longer. 
Reformers  were  concerned  chiefly  with  the  effect  of  such 
excessive  hours  of  labor  upon  the  health  of  the  woman- 
hood of  the  nation.  In  the  tide  of  humanitarianism  that 
swept  the  decade  of  the  forties,  the  10-hour  work-day 
for  women  was  demanded.  Organized  workers  adopted 
the  10-hour  day  program.  At  first  women  workers 
engaged  in  unsuccessful  strikes  to  secure  the  shorter  day, 
but  in  1847  the  10-hour  day  was  introduced  in  New 
Hampshire  as  a  result  of  the  persistent  efforts  of  or- 
ganized women  employees.  This  was  the  first  time  in 
our  history  that  the  work-day  for  women  was  reduced  to 
10-hours.  The  early  laws  proved  wofully  deficient,  and 
the  problem  continued  to  be  a  serious  one.  Not  until 
1879  did  the  United  States  have  an  enforceable  law  limit- 
ing the  hours  of  labor  for  women.  The  first  decade  of 
the  present  century  witnessed  the  spread  of  a  successful 
movement  for  the  8-hour  day  for  women  workers. 

Legislative  measures  in  behalf  of  adult  male  workers 
have  been  so  limited  that  the  United  States  is  still  among 
those  countries  in  which  the  ideal  of  "eight  hours  foT 
work,  eight  hours  for  rest,  and  eight  hours  for  what  you 


Hours  of  Labor  103 

will"  has  not  been  achieved  for  all  workers.  The  1909 
Census  of  Manufactures  showed  that  of  the  more  than 
6,500,000  employees  in  all  industries  covered  by  the  re- 
port, 76  per  cent  were  employed  in  establishments 
operating  between  54  and  60  hours  a  week.  Considerable 
progress  was  made  during  the  next  few  years,  but,  accord- 
ing to  the  census  figures  for  1914,  fully  25  per  cent  of 
the  more  than  7,000,000  workers  in  manufacturing  indus- 
tries were  working  from  60  to  72  hours  weekly.  Follow- 
ing 1914,  the  unprecedented  demand  for  labor  put  or- 
ganized workers  in  an  advantageous  position  and  the 
basic  8-hour  day  was  won  by  large  numbers  of  employees 
in  organized  trades.  An  investigation  of  liours  of  employ- 
ment of  912,900  union  members  in  the  leading  organized 
trades  and  occupations  of  61  principal  cities  of  the  United 
States  in  1919  showed  that  working  hours  had  decreased 
steadily,  being  8  per  cent  less  than  in  1907.  There  were 
still  many  occupations  in  which  even  unionized  workers 
were  working  excessive  hours.  Waiters  worked  a  10- 
or  12-hour  day  and  a  60-  or  72-hour  week,  the  60-hour 
week  being  general.  Chauffeurs,  teamsters,  and  drivers 
worked  from  10  to  12  hours  a  day,  the  working  week 
ranging  from  55  to  77  hours." 

Census  returns  for  1919  indicate  that  considerable 
progress  is  being  made  towards  a  shorter  work-day  in 
manufacturing  industries.  Of  the  9,096,372  wage-earners 
reported,  4,418,693,  or  48.6  per  cent,  were  employed  in 
establishments  where  the  prevailing  hours  of  labor  per 
week  were  48  or  under,  while  in  the  previous  census 
(1914),  the  number  employed  in  this  class  of  establish- 
ments was  only  833,330,  representing  11.8  per  cent  of  the 
total  number  of  wage-earners.  Whereas  in  1914,  74.6 
per  cent  of  the  total  number  of  wage-earners  in  manu- 
facturing industries  were  employed  in  establishments 
where  the  prevailing  hours  of  labor  per  week  were  not 
less  than  54,  and  26.9  per  cent  in  establishments  operating 
not  less  than  60  hours  per  week,  the  figures  for  1919 
show  that  only  34.9  per  cent  were  employed  in  the  former 

•See  U.  8.  Bureau  of  Labor  Statistics,  Bulletin  No.  274,  1919. 


104  Hours  of  Labor 

class  of  establishments  and  12.1  per  cent  in  the  latter. 
Following  1919,  when  the  business  depression  set  in  and 
labor  became  abundant,  many  industries  abandoned  the 
basic  8-hour  day  and  reintroduced  the  10-hour  day,  and 
the  10-hour  or  12-hour  day  still  obtains  except  in  the 
highly  organized  trades  such  as  carpentering  and  printing. 

The  Advantages  and  Disadvantages  of  the  Shorter 
Work-Day. — Those  who  advocate  the  shorter  working-day 
in  industry  base  their  case  upon  several  definite  conten- 
tions. It  is  stated  that  the  shorter  work-day  will  provide 
work  for  the  unemployed;  increase  the  general  wages  of 
labor;  augment  the  consumption  power  of  the  population, 
and  so  result  in  a  greater  market  for  commodities;  in- 
crease the  total  profits  of  industry  by  enhancing  the  effi- 
ciency of  labor;  improve  the  domestic  life  of  the  nation 
by  giving  each  worker  a  chance  to  enjoy  the  comforts 
of  home  and  family;  offer  opportunities  for  the  enjoy- 
ment of  social,  cultural,  and  religious  life;  and  make  it 
possible  for  the  workers  to  discharge  properly,  the  or- 
dinary duties  of  citizenship. 

Generally  speaking,  employers  of  labor  are  far  from 
being  convinced  of  the  social  and  economic  advantages 
of  the  shorter  work-day.  Many  employers  who  have  re- 
duced hours  of  labor  in  their  establishments  have  recog- 
nized these  advantages,  but  comparatively  few  have  made 
the  experiment  voluntarily.  Employers  who  oppose 
reduction  in  the  hours  of  employment  do  so  on  the 
grounds  that  such  action  would  involve  a  proportionate 
decrease  in  the  productive  capacity  of  the  workmen;  an 
increase  in  labor  costs  and  general  production  costs: 
higher  prices  of  commodities  to  consumers  on  account  of 
enhanced  expenses  of  production;  destruction  of  the  na- 
tion's power  to  compete  in  world  markets  because  of  the 
longer  work-day  with  its  consequent  lower  labor  costs  in 
foreign  countries;  a  decrease  in  the  wages  of  labor  on 
account  of  the  diminished  productivity  incident  to  the 
shorter  day;  an  increase  in  intemperance,  idling,  and 
moral  lassitude;  failure  to  provide  employment  for  the 
unemployed;  and,  finally,  no  guaranty  that  the  workers 


Hours  of  Labor  105 

would  make  proper  use  of  opportunities  for  greater  social 
and  cultural  development. 

Thus  it  seems  that  every  argument  advanced  by  those 
who  advocate  a  shorter  work-day  is  met  by  a  counter- 
argument from  those  who  are  convinced  that  such  a  move- 
ment would  entail  grave  social,  moral,  and  economic  con- 
sequences. What  does  the  industrial  experience  of  pro- 
gressive nations  teach  concerning  the  social  and  economic 
advantages  of  the  shorter  work-day?  Evidence  must  be 
sought  in  an  analysis  of  experiences  with  the  longer  and 
the  shorter  working-day. 

The  Twelve-Hour  Day  and  the  Continuous  Shift  System. 
—Many  industries  in  the  United  States  employ  their 
workers  12  hours  a  day  and  7  days  a  week.  Thou- 
sands of  employees  in  paper  mills,  cement  mills, 
smelters,  blast  furnaces,  steel  works,  power  plants,  and 
other  enterprises  are  working  12  full  hours  every 
day  in  the  week.  From  their  very  nature,  some  industries 
require  continuous  operation,  24  hours  a  day  and  7  days 
a  week,  as  in  the  case  of  the  blast  furnace.  It  is  manifestly 
impossible  for  the  workers  to  perform  continuous  service. 
In  making  the  change  from  the  day  shift  to  the  night 
shift  it  has  been  a  common  policy  to  require  a  man  to 
work  24  consecutive  hours.  Such  a  system  has  serious 
effects  upon  the  health,  the  efficiency,  and  the  whole  life 
of  the  worker,  but  the  practice  has  persisted  in  many 
countries,  including  the  United  States.  More  than  40  per 
cent  of  the  employees  in  the  iron  and  steel  industry  in 
1910  worked  72  hours  or  over  per  week,  and  about  20  per 
cent  worked  84  hours  or  over  per  week,  according  to  the 
United  States  Bureau  of  Labor  Statistics.  This  meant  a 
12-hour  day  and  a  7-day  week  for  one-fifth  of  the  173,000 
employees  whose  hours  were  investigated.  Moreover, 
steel  manufacturing  is  a  continuous  industry,  and  thou- 
sands of  men  work  consecutively  either  18  or  24  hours 
once  in  every  two  weeks,  in  order  to  make  the  shift  from 
day  to  night  work. 

In  1909  nine-tenths  of  the  workers  in  blast  furnaces 
in  the  United  States  worked  either  18  or  24  hours  once 


106  Hours  of  Labor 

or  twice  each  month.  At  that  time  50  per  cent  of  th5 
steel  workers  in  America  were  said  to  have  a  12-hour  day. 
The  United  States  Steel  Corporation  has  announced 
several  times  in  recent  years  that  it  was  considering  the 
shorter  work-day,  but  for  some  reason  the  long  day  has 
been  retained.  The  12-hour  day  and  the  7-day  week  have 
prevailed  in  other  industries.  A  third  of  those  actually 
engaged  in  manufacturing  processes  in  1910  worked  not 
only  12  hours  a  day  but  7  days  a  week;  and  thousands 
of  others  worked  10  hours  a  day  and  7  days  a  week.  Fifty 
thousand  or  more  workers  throughout  the  United  States 
worked  from  18  to  24  hours  once  or  twice  a  month  during 
the  change  of  turns.  The  percentage  of  employees  work- 
ing 72  hours  or  over  per  week  ranged  from  40  per  cent 
in  cement  manufacturing  to  95  per  cent  in  sugar  and  molasses 
manufacturing.30  The  physical,  social,  and  industrial  effects 
of  the  continuous  system,  whether  it  is  operated  on  the 
basis  of  a  12-hour  day  and  a  72-hour  week  or  an  8-hour 
day  and  a  7-day  week,  are  so  obviously  detrimental  that 
the  movement  for  a  shorter  work-day  in  continuous-opera- 
tion industries  has  met  with  general  public  favor. 

The  Comparative  Productivity  of  Night  Work  and  Day 
Work. — Civilized  peoples  have  recognized  the  fact  that, 
except  in  cases  of  necessity  or  in  periods  of  great  emer- 
gency, night  work  is  undesirable.  Under  modern  indus- 
trialism, however,  night  work  has  aided  greatly  the  pro- 
duction of  commodities,  and  this  has  strengthened  the 
conviction  of  employers  that  such  work  is  economically 
desirable.  It  is  necessary  to  find  out  whether  night  work 
has  deleterious  effects  upon  the  health  of  the  laborers 
and  conduces  to  an  ultimate  diminution  in  the  supply 
of  efficient  labor.  If  it  can  be  proved  that  night  employ- 
ment affects  adversely  in  the  long  run  both  the  quality 
and  the  quantity  of  labor,  its  discontinuance  will  be 
justified.  Industry  should  function  for  men  and  not  men 
for  industry.  If  modern  industry  is  to  be  made  sub- 
servient to  human  interests,  then  even  a  relatively  high 
degree  of  efficiency  in  night  operations  must  be  forfeited 

»«  In  1922  not  lesa  than  300,000  American  workmen  are  employed  on 
12-hour  shifts  in  continuous  industries. 


Hours  of  Labor  107 

if  it  is  purchased  with  rapid  exhaustion  of  the  health 
and  energy  of  the  workers,  to  say  nothing  of  the  tre- 
mendous social  cost  that  may  be  involved. 

Industrial  experience  has  shown  that  the  possession  of 
extraordinary  physical  strength  and  self-control  facili- 
tates the  reversal  of  the  ordinary  routine  of  day  work 
and  night  rest  with  little  or  no  unfavorable  effect  on 
health  and  efficiency.  Unusual  vitality  and  self-control, 
however,  are  not  a  common  possession.  It  has  been  found 
that  the  most  serious  obstacle  to  a  reversal  of  the  routine 
is  the  lack  of  self-discipline.  Many  night  workers  try 
to  enter  into  the  numerous  activities  of  day  life  that  pre- 
clude sleep,  and  also  do  their  work  at  night.  Evidence 
gathered  by  the  British  Health  of  Munition  Workers' 
Committee  places  permanent  night  workers,  whether 
judged  on  the  basis  of  output  or  loss  of  time,  in  a  very 
unfavorable  position,  as  compared  with  day  workers. 

Systems  of  night  work  differ.  There  is  the  continuous 
system,  in  which  employees  labor  by  night  and  do  not 
attend  the  establishment  at  all  by  day,  and  the  discon- 
tinuous system,  in  which  the  workers  change  to  the  night- 
turn  at  regular  intervals,  usually  every  other  week.  III 
addition  to  these  systems  there  are  several  variations  of 
a  minor  character.  The  conclusions  of  the  British  com- 
mittee with  regard  to  the  effects  of  night  work  were  that : 
(1)  Continuous  night  work  is  productive  of  definitely 
less  output  than  the  discontinuous  system,  and  the  output 
of  the  continuous  day  shift  does  not  make  up  for  this 
loss  in  production.  Moreover,  there  is  a  marked  difference 
between  the' rates  of  output  of  night  and  day  shifts  on 
the  discontinuous  plan.  (2)  The  case  against  night  work 
is  sufficiently  established,  the  investigation  in  each  case 
showing  the  inferiority  of  night  labor.  (3)  The  system 
of  continuous  night  shifts,  especially  for  women,  is  unde- 
sirable and  should  bo  prohibited.  (4)  The  inferiority 
of  the  continuous  night  worker  results  from  the  failure 
to  secure  proper  rest  and  sleep  during  the  day.  Women 
on  continuous  night  work  are  likely  to  perform  domestic 
duties,  and  this  added  strain  may  account  for  the  inferior 


108  Hours  of  Labor 

results  of  their  industrial  activities.  The  tendency  to 
devote  to  amusement  and  other  activities  the  time  which 
should  be  spent  in  rest  and  sleep  is  certainly  as  common 
among  men  as  among  women  workers,  and  accounts 
largely  for  loss  of  efficiency  and  loss  of  time  on  the  part 
of  both  sexes  in  night  shifts. 

Opposition  to  night  work,  then,  rests  on  numerous  con- 
siderations, among  which  are:  (1)  the  remotely  injurious 
effects  of  permanent  night  work  manifested  in  later  years 
of  the  worker's  life;  (2)  the  disarrangement  of  the  social 
activities  of  the  worker's  leisure  hours;  (3)  the  dis- 
turbance of  the  ordinary  associations  of  normal  family 
life ;  (4)  the  unfavorable  effect  of  night  work  upon  general 
efficiency  and  output;  and  (5)  the  moral  effect  of  night 
labor,  particularly  in  the  case  of  women  workers  who 
must  go  to  and  from  work  in  darkness.  Recent  experi- 
ences of  industrial  nations  have  added  much  to  the  evi- 
dence against  the  continuation  of  night  work,  except  in 
extraordinary  circumstances  and  unavoidable  emergen- 
cies. Whether  judged  from  an  educational,  social,  or 
economic  standpoint,  night  work  is  undesirable,  and  while 
its  immediate  prohibition  for  all  workers  seems  hardly 
practicable,  the  effort  to  abolish  it  for  female  workers 
should  be  continued,  and  its  ultimate  disappearance  for 
all  workers  planned.  Not  sentiment,  but  the  stern  facts 
of  social,  physical,  and  industrial  experience  have  given 
rise  to  the  expression  so  frequently  heard  among  the 
workers,  that  the  night  was  made  for  rest  and  sleep  and 
not  for  work. 

Overtime  and  Its  Abuses. — In  opposing  the  movement 
for  a  shorter  work-day  employers  have  often  stated  that 
what  the  laborers  want  is  not  an  actual  8-hour  day 
but  a  basic  day  of  8  hours  with  extra  rates  of  pay  for 
additional  hours.  Overtime,  which  is  usually  paid  for  at 
rates  higher  than  for  normal  hours,  is  doubtless  desired 
by  many  workers.  On  the  other  hand,  workers  can  get 
overtime  only  at  the  request  of  the  employer,  and  if 
adequate  wages  are  paid  for  the  regular  day's  work  it 
is  hardly  likely  that  workingmen  will  covet  overtime, 


Hours  of  Labor  109 

since  the  average  worker  is  glad  to  leave  the  plant  at  the 
end  of  the  regular  day. 

Some  overtime,  like  some  night  work,  will  always  be 
necessary,  so  long  as  breakdowns  and  other  irregularities 
occur  in  industry.  It  is  not  the  use  but  the  abuse  of 
these  extra  hours  of  work  that  entails  unfavorable  conse- 
quences. Overtime  ordinarily  refers  to  the  hours  of  labor 
in  excess  of  the  normal  working-day.  In  very  recent 
years  considerable  attention  has  been  given  to  the 
physical,  social,  and  economic  effects  of  excessive  over- 
time, and  serious  objections  have  been  raised  against  it.* 
(1)  Overtime  is  likely  to  impose  too  severe  a  strain  on 
the  workers.  While  it  is  granted  that  for  an  emergency 
overtime  is  necessary  and  effective,  the  conviction  is  grow- 
ing that  after  a  period  the  rate  of  production  tends 
to  decrease  and  the  extra  hours  result  in  little  or  no 
additional  output.  (2)  Overtime  frequently  results  in  a 
large  amount  of  lost  time.  Workers  become  exhausted 
and  take  a  rest,  they  accumulate  extra  funds  and  are 
tempted  to  lay  off,  and  many  of  them,  chiefly  the  older 
ones  and  those  of  weak  constitution,  suffer  physical  break-' 
down.  (3)  Overtime  imposes  a  very  serious  strain  upon 
the  management,  the  executive  staff,  and  the  foremen, 
because  of  the  actual  length  of  the  work-day  and  the 
additional  responsibility  and  anxiety  relative  to  the  main- 
tenance of  efficiency  and  output  in  the  plant.  Moreover 
these  employees  cannot  lay  off  like  the  ordinary  laborers. 
(4)  Overtime  is  likely  to  curtail  unduly  the  period  of  rest 
and  sleep  for  those  who  have  to  travel  long  distances  to 
and  from  their  work.  This  has  especially  harmful  conse- 
quences for  young  persons.  (5)  Overtime  produces 
fatigue,  and  the  workers,  being  too  tired  to  eat,  seek 
artificial  stimulants  which  in  turn  affect  their  efficiency 
and  welfare.5 

Overtime  is  common  in  most  industries.     Seasonal  in- 

4  Sec  Josephine  GoMmark 's  Fatiffve  and  Efficiency ;  also  the  re- 
ports of  the  British  Health  of  Munition  Workers'  Committee,  U.  S. 
Bureau  of  Labor  Statistics,  Bulletin  No.  249. 

•  Hours,  Fatigue,  and  Health  w  British  Munition  Factories,  U.  8. 
Bureau  of  Labor  Statistics,  Bulletin  No.  221,  1917,  p.  21. 


110  Hours  of  Labor 

dustries  with  their  periodical  rush  seasons  lengthen  the 
day's  work,  strain  the  health  and  endurance  of  the 
workers  to  the  utmost,  and  inflict  permanent  physical 
injuries  that  cannot  be  estimated,  and  for  which  there 
obtains  no  compensation  during  slack  or  dull  periods. 
"Regular  seasonal  overtime  .  .  .  leaves  the  worker  with 
too  great  a  physiological  deficit.  There  is  no  rebound, 
or  an  infinitely  slow  one  when  our  elastic  capacities  have 
been  too  tensely  stretched.  It  takes  much  more  time, 
rest,  repair  than  the  working  girl  can  possibly  afford 
to  make  good  such  metabolic  losses.  Compensation — off- 
time — comes  too  late. ' ' 6  American  and  European  ex- 
periences have  proved  that  overtime  work  is  essentially 
inefficient,  results  in  loss  of  time  and  output,  and  is  as 
unfavorable  in  its  effects  on  business  as  it  is  physically 
deleterious  to  the  workers. 

Sunday  Labor. — The  industrial  experiences  of  advanced 
nations  show  conclusively  that  intervals  of  rest  are  needed 
to  overcome  mental  and  physical  fatigue  and  exhaustion, 
but  the  lessons  of  experience  are  frequently  disregarded 
*in  the  operation  of  industry.  Enlightened  employers  have 
recognized  both  the  social  and  the  economic  value  of  a 
periodic  day;  of  rest.  The  great  majority  of  employers 
consulted  in  a  recent  investigation  were  unfavorably  dis- 
posed to  Sunday  labor.7  Their  opposition  was  based  upon 
the  following  considerations:  (1)  Administrative  difficul- 
ties. Supervision  of  Sunday  work  is  difficult  and  imposes 
a  severe  strain  upon  the  foremen ;  inexperienced,  substitute 
supervision  would  entail  much  waste.  (2)  Economic  ineffi- 
ciency. Sunday  labor  means  high  wages  and  increased 
cost  of  operation,  is  usually  characterized  by  low  output, 
and  is  followed  by  a  loss  of  time  during  other  days  of  the 
week.  (3)  Social  and  religious  factors.  Considerable  feel- 
ing obtains  among  workers  of  every  class  that  the  seventB 
day  should  be  set  aside  as  a  day  of  rest  and  that  it  is 
good  for  body  and  mind.  The  evidence  which  has  been 
collected  concerning  Sunday  labor  shows  that  if  the  maxi- 

•  Goldmark,  op.  cit .,  p.  88. 

1 U.  S.  Bureau  of  Labor  Statistics,  Bulletin  No.  221,  1917,  p.  15. 


Hours  of  Labor  111 

mum  of  output  is  to  be  secured  and  maintained  for  any 
length  of  time,  a  weekly  rest  period  must  be  allowed. 
Both  on  economic  and  on  social  grounds,  Sunday  work 
should  be  limited  to  sudden,  unavoidable  emergencies, 
and  the  making  of  necessary  repairs  that  cannot  be  ac- 
complished when  the  industry  is  in  full  operation. 

Hours  of  Labor  in  Relation  to  Output. — The  discussion 
has  already  suggested  that  a  very  definite  relation  exists 
between  output  and  the  length  of  the  working-day.  The 
conviction  is  growing  among  employers  that  excessive 
hours  of  labor  result  ultimately  in  diminished  production, 
an  inferior  quality  of  work,  and  much  greater  cost  of 
operation,  to  say  nothing  of  the  unfavorable  effects  upon 
the  constitution  of  the  workers  and  the  encroachment 
upon  social  and  domestic  life.  Many  employers  are  also 
convinced  that  a  substantial  reduction  in  hours  of  labor 
can  be  effected  without  any  reduction,  or  at  most  a  slight 
reduction,  in  output.  The  opinion  which  at  one  time  pre- 
vailed, that  long  hours  necessarily  result  in  larger  out- 
put, is  being  replaced  gradually  by  the  conviction,  based 
upon  experience,  that  a  12-hour  or  14-hour  day,  except 
for  brief  periods,  is  neither  economically  profitable  nor 
socially  sound. 

Many  investigations  have  been  made  which  furnish  evi- 
dence of  the  bad  economic  effects  of  excessive  hours  of 
employment.  A  few  years  ago  the  British  Health  of 
Munition  Workers'  Committee  discovered  after  a  thor- 
ough investigation  that,  generally  speaking,  a  reduction 
varying  from  7  to  20  hours  in  the  weekly  hours  of  actual 
work  in  no  case  resulted  in  more  than  an  insignificant 
diminution  of  total  output,  while  on  the  average  it  re- 
sulted in  a  substantial  increase  in  production.  In  a  study 
of  boy  workers  it  was  found  that  a  week  of  47.4  actual 
working  hours  had  an  output  24  per  cent  greater  than 
a  week  of  72.5  actual  working  hours,  and  an  investigation 
of  adult  male  workers  showed  that  a  working  week 
averaging  51.8  hours  resulted  in  an  output  14  per  cent 
greater  than  a  week  averaging  60.3  hours. 

There    have    been    numerous    demonstrations    of   the 


112  Hours  of  Labor 

greater  efficacy  of  the  shorter  work-day,  only  a  few  of 
which  can  be  cited  here.  As  early  as  1858  the  introduc- 
tion of  the  8-hour  day  in  the  lead  mines  of  South 
Yorkshire,  England,  resulted  in  increased  production.  In 
1892  a  joint  agreement  between  employer  and  employees 
in  the  engineering  works  of  Mather  and  Platt,  at 
Salford,  England,  provided  for  an  experiment  with  the 
8-hour  day  and  the  48-hour-week  for  a  period  of  one 
year.  The  results  showed  a  considerable  decrease  in  lost 
time  and  a  marked  saving  in  the  cost  of  operation.  The 
management  was  convinced  that  it  was  now  "working 
in  harmony  with  natural  law,  instead  of  against  it,"  and 
that  the  "most  economical  production  is  obtained  by  em- 
ploying men  only  so  long  as  they  are  at  their  best — when 
this  stage  is  passed  there  is  no  true  economy  in  continued 
work."  In  1906  the  8-hour  shift  was  adopted  in  the 
tin-plate  mills  of  South  Wales,  and  the  managers  found 
that  there  followed  an  increase  of  output  in  the  rolling 
mills  of  at  least  20  per  cent,  and  in  the  open  hearth  milling 
processes  of  12^  per  cent.  Between  1892  and  1904,  an 
experiment  with  reduced  hours  of  work  in  a  Belgian 
chemical-products  plant  showed  that  "In  the  8-hour  day, 
representing  7y2  hours  of  actual  work,  the  same  workman 
at  the  same  ovens,  with  the  same  implements  and  raw 
material,  produced  as  much  as  previously  in  12  hours, 
representing  10  hours  of  actual  work."8  Moreover,  the 
worker's  earnings  for  8  hours  were  the  same  as  for  12 
hours  under  the  old  system.9 

Similarly  conclusive  evidence  has  been  gleaned  in  the 
United  States  under  the  direction  of  the  federal  Public 
Health  Service.  In  an  exhaustive  comparative  study  of 
an  8-hour  plant  and  a  10-hour  plant  it  was  found 
that  the  8-hour  system  is  more  efficient.  The  out- 
standing feature  of  the  8-hour  system  was  steady 
maintenance  of  output,  while  the  prominent  feature  of 
the  10-hour  system  was  the  decline  of  output.  Under 

*  Goldmark,  op.  cit.,  p.  146. 

•Stephan  Bauer,  "The  Road  to  the  Eight-Hour  Day,"  Monthly 
Labor  Beview,  August,  1919,  p.  49. 


Hours  of  Labor  113 

the  10-hour  system  lost  time,  artificial  restriction  of  out- 
put, fatigue,  and  industrial  accidents  were  prevalent, 
while  under  the  8-hour  system  these  deficiencies  were 
reduced  to  a  minimum.  Moreover,  under  the  10-hour 
system  a  12-hour  night  shift  was  maintained,  which 
was  characterized  by  a  progressive  slowing  in  the  rate 
of  production  during  the  night  and  by  an  abrupt  fall 
in  output  in  the  last  two  hours.  In  every  respect  the 
8-hour  day  proved  more  advantageous.10  Numerous  concerns' 
have  voluntarily  introduced  the  shorter  work-day  and  have 
found  that  production  has  been  maintained  or  increased.10" 
The  results  of  all  impartial  investigations  give  unqualified 
support  to  the  movement  for  the  8-hour  work-day.  In 
most  instances  increased  output  has  been  ascribed  solely  to 
the  greater  energy  and  promptness  of  the  workers. 

The  Testimony  of  Industrial  Commissions. — The  United 
States  Industrial  Commission  appointed  by  Congress  in 
1898  spent  four  years  in  hearing  testimony  and  gathering 
information  on  industrial  conditions.  In  its  conclusion 
concerning  hours  of  employment  the  commission  stated 
that  the  entire  tendency  of  industry  is  in  the  direction 
of  an  increased  exertion,  and,  this  being  true,  there  is  but 
one  alternative  if  the  working  population  is  to  be  pro- 
tected in  its  health  and  trade  longevity ;  namely,  a  reduc- 
tion of  the  hours  of  labor.11  Fourteen  years  later,  under 
the  authority  of  the  Act  of  Congress  of  August  23,  1912, 
the  United  States  Commission  on  Industrial  Relations 
began  an  investigation  that  lasted  for  several  years,  its 
final  report  appearing  in  1916.  This  commission,  in  its 
conclusions  on  hours  of  employment,  stated  the  case  for 
the  shorter  work-day  as  follows : 

1.  The  physical  well-being,  mental  development,  and 
recreational  needs  of  every  class  of  population  demand 
that  under  normal  circumstances  the  working-day  should 
not  exceed  eight  hours. 

•Uaitcd  States  Public  Health  Service,  Bulletin  No.  106,  Com- 
parison of  An  Eight-Hour  Plant  with  a  Ten-Hour  Plant,  1920,  p.  20. 

*°  According  to  the  American  Engineering  Council  the  change  from 
the  12-honr  day  to  the  K-hour  dny  lias  gnu-mlly  Increased  the  quantity 
production  per  man  up  to  ax  high  an  25  p«r  cent. 

11  See  Final  Report  of  the  U.  8.  Industrial  Commission,  1002,  Vol.  XIX, 
p.  774. 


114  Hours  of  Labor 

2.  A  very  large  percentage  of  the  workmen  in  manu- 
factures,  transportation,   and   mining   work   more   than 
eight  hours  a  day.     This  is  in  marked  contrast  to  the 
condition  of  those  whose  economic  position  enables  them 
to  define  the  length  of  their  own  working-day. 

3.  Practical  experience  has  shown  that  the  reduction 
of  working  hours  is  in  the  interest  not  only  of  the  worker 
and  of  the  community,  but  of  the  employer  as  well. 

4.  The  regulation  by  legal  enactment  of  working  hours 
of  adult  workmen  is  not  generally  practicable  nor  de- 
sirable, except  for  public  employees. 

5.  In  the  so-called  continuous  occupations,  other  than 
the  movement  of  trains,  requiring  work  during  both  day 
and  night  for  six  or  seven  days  per  week,  the  state  and 
federal  governments  should  directly  intervene,  so  that  the 
working  hours  should  not  exceed  eight  per  day  nor  extend 
to  more  than  six  days  per  week.12 

The  reduction  in  hours  of  employment  has  not  lessened 
the  ability  of  progressive  nations  to  compete  in  the 
world's  commodity  markets,  since  cost  of  production  and 
efficiency  have  been  such  as  to  permit  nations  with  the 
shorter  day  to  surpass  nations  where  excessive  hours  pre- 
vail. Moreover,  instead  of  the  shorter  day  resulting  in 
increased  drunkenness,  it  has  stimulated  temperance,  in- 
terest in  social  and  economic  problems,  and  a  better  type 
of  citizenship. 

The  Movement  for  the  Eight-Hour  Day. — The  modern 
industrial  system  had  not  long  been  generally  established 
before  the  working  class  and  reformers  began  to  revolt 
against  the  deleterious  effects  of  excessive  hours  of  em- 
ployment. Gradually  the  8-hour  day  has  become  the 
ideal  of  the  masses,  except  the  mine  workers  in  the  United 
States  and  in  other  countries  who  are  demanding  a  6-hour 
day  and  a  5-day  week. 

The  6-hour  day  prevailed  in  the  German  mining  in- 
dustry down  to  the  end  of  the  fifteenth  century,  and  in 
1467  the  miners  of  Freiberg  went  on  strike  against  an 
extension  of  the  number  of  hours  to  eight.  Gradually, 

"Final  Beport,  1916,  p.  69. 


Hours  of  Labor  115 

however,  the  hours  were  lengthened  to  twelve  a  day. 
During  the  early  part  of  the  nineteenth  century  the  daily 
hours  of  labor  in  English  factories  were  from  twelve  to 
fourteen.  After  general  agitation  the  hours  of  work 
were  reduced  for  children  and  women.  The  trade  unions 
organized  a  movement  for  an  8-hour  day  in  the  build- 
ing trades  at  Melbourne,  Australia,  in  1856,  and  on 
April  21  of  the  same  year  these  trades  secured  the 
8-hour  day  by  peaceful  methods.  It  was  made  permanent 
by  a  four  months'  strike  in  1859.  In  rapid  succession 
other  unions  secured  a  similar  work-day.  In  1873  the 
Parliament  of  New  Zealand  passed  a  law  providing  that 
no  child  or  woman  should  work  longer  than  eight  hours, 
and  Victoria  did  the  same  in  1874,  both  states  adopting 
the  half-holiday  on  Saturday  afternoons.  Subsequent  to 
1901  the  8-hour  law  in  New  Zealand  has  provided  for 
a  maximum  of  48  hours  of  work  a  week,  or  8%  hours 
a  day,  for  adult  men,  and  45  hours  weekly,  or  8*4  hours 
a  day,  for  women. 

In  1850  the  movement  for  an  8-hour  day  took 
definite 'form  in  the  United  States.  Provision  of  work 
for  the  unemployed  was  the  chief  motive  behind  the  move- 
ment. There  soon  developed  also  a  second  motive  which 
implied  that  the  8-hour  day  would  mean  high  wages. 
The  American  Federation  of  Labor  emphasizes  the  slogan 
that 

"Whether  you  work  by  the  piece 

Or  work  by  the  day, 
Decreasing  the  Hours 
Increases  the  Pay." 

The  Labor  Reform  Association,  organized  in  1864,  and 
the  Grand  Eight-Hour  League  of  Massachusetts,  organized 
in  1865,  took  up  the  agitation  for  the  8-hour  day 
which  had  been  championed  by  Ira  Steward,  machinist 
and  social  reformer,  in  1850.  The  8-hour  day  was  the 
main  topic  discussed  at  a  national  labor  congress  held 
in  Baltimore  on  August  20,  1866,  and  a  National  Labor 
Parly  was  organized  to  carry  on  the  fight.  Six  statei 


116  Hours  of  Labor 

enacted  laws  which  were  either  unenforced  or  unenforce- 
able. In  1868  the  National  Labor  Union  secured  the  legal 
introduction  of  the  8-hour  day  for  workmen  and  em- 
ployees of  the  federal  government.  Organized  labor  was 
convinced  that  voluntary  agreements  were  more  reliable 
than  legislation.  Subsequent  to  1869,  new  eight-hour 
leagues  were  founded,  and  in  May,  1872,  the  8-hour 
day  was  introduced  in  the  building  trades  of  New  York, 
after  a  three  months'  strike.  Under  the  leadership  of 
what  became  known  later  as  the  American  Federation 
of  Labor  the  8-hour  day  movement  was  given  more 
unified  expression.  In  1884  the  new  federation  resolved 
to  call  a  general  strike  in  May,  1886,  for  the  8-hour 
day.  About  13,000  workers  secured  the  8-hour  day, 
temporarily  at  least,  as  a  result  of  this  strike.  In  1888 
the  American  Federation  of  Labor,  at  its  St.  Louis  con- 
vention, decided  upon  a  new  general  demonstration  for 
the  8-hour  day,  to  take  place  on  May  1,  1890.  The 
movement  soon  spread  to  Europe  and  between  1900  and 
1914  the  shorter  work-day  was  incorporated  into  agree- 
ments and  laws  in  many  countries. 

Prior  to  the  outbreak  of  the  World  War  comparatively 
few  workers  in  the  United  States,  other  than  those  in 
the  building  trades,  had  secured  an  8-hour  day.  Be- 
ginning with  the  spring  of  1915,  however,  a  great  deal 
of  progress  was  made,  and  by  June  30,  1919,  hours  of 
labor  had  been  reduced  to  eight  for  at  least  3,462,000 
persons.  This  new  phase  of  the  movement  began  in 
Bridgeport,  Connecticut,  in  1915,  when  a  succession  of 
successful  "eight-hour"  strikes  occurred  in  industries 
making  munitions  for  European  belligerents.  The 
coal  miners  soon  won  the  straight  8-hour  day  and, 
under  the  Adamson  act  passed  in  1916,  the  basic 
8-hour  day  was  introduced  for  railroad  workers.  The  Na- 
tional War  Labor  Board  encouraged  the  adoption  of  the 
basic  8-hour  day  in  many  industries.  For  many  years 
the  8-hour  day  had  obtained  in  government  navy- 
yards  and  arsenals,  and  it  was  now  extended  to  cover 
government  contracts  connected  with  the  construction  of 


Hours  of  Labor  117 

cantonments  and  ships  during  the  Great  War.  Meat 
packers,  garment  workers,  and  lumbermen  were  among 
those  who  soon  won  the  basic  8-hour  day.  The  move- 
ment continued  to  grow  even  after  the  signing  of  the 
armistice,  until  scarcely  a  trade  or  industry  existed  which 
did  not  have  some  8-hour  employees.  Approximately 
three-fifths  of  the  employers  of  clerical  help  kept  their 
work-week  within  42  hours  and  one-third  established  a  limit 
of  39  hours  or  less.  The  Saturday  half-holiday  also  made 
progress  in  clerical  employments. 

In  interpreting  the  movement  for  the  8-hour  day 
it  is  necessary  to  keep  in  mind  that  the  majority  of  the 
workers  who  are  supposed  to  have  secured  the  shorter 
work-day  in  recent  years  were  in  reality  given  a  basic 
and  not  an  actual  8-hour  day.  An  actual  or  straight 
8-hour  day  consists  of  only  8  hours  with  no  over- 
time permitted  except  in  emergencies,  while  a  basic 
8-hour  day  simply  means  that  8  hours  is  a  day's  work 
and  any  number  of  extra  hours  may  be  worked  at  an 
increased  rate  of  pay.  Summarizing  the  situation  regard- 
ing the  progress  of  the  movement  for  a  shorter  work-day 
in  the  United  States,  it  may  be  said  that  for  unskilled 
labor  there  exists  as  yet  no  definite  standard  of  hours, 
the  length  of  the  working-day  depending  upon  whether 
or  not  the  workers  are  associated  with  skilled  workers 
and  upon  the  wishes  of  the  individual  employer.  In  the 
case  of  the  skilled  workers,  who  constitute  a  minority 
of  all  workers  in  the  country,  the  8-hour  day  as  a 
standard  seems  to  have  been  generally  established,  and 
considerable  progress  has  been  made  towards  a  44- 
hour  week.  For  the  great  mass  of  workers — the  unskilled 
and  unorganized — 10  or  more  hours  still  constitute  a 
day's  work,  the  gains  made  in  the  way  of  shorter  hours 
of  work  during  the  war  being  lost  in  the  period  of  unem- 
ployment that  followed,  when  employers  reintroduced  the 
longer  work-day. 

In  practically  every  European  country  the  movement 
for  the  8-hour  day  has  made  remarkable  progress  in 
recent  years.  Information  for  the  United  Kingdom  shows 


118  Hours  of  Labor 

that  in  the  quarter  of  a  century  preceding  1919,  the  num- 
ber of  employees  reported  as  having  their  hours  reduced 
averaged  about  120,000  per  annum.  In  1902,  when  the 
maximum  weekly  hours  permitted  in  textile  factories 
under  the  Factory  and  Workshop  Act  were  restricted  to 
55l/2,  more  than  a  million  employees  had  their  weekly 
hours  of  work  reduced  by  an  average  of  one  hour.  In 
1909,  mainly  as  a  result  of  the  Coal  Mines  Regulation 
Act  limiting  the  hours  of  labor  in  coal  mines,  over  a  half- 
million  workers  obtained  reductions  averaging  about  four 
hours.  In  other  years  of  the  same  period  the  number 
affected  annually  ranged  from  7,000  in  1903  to  a  maxi- 
mum of  about  155,000  in  1911.  During  the  first  seven 
months  of  1919  nearly  six  million  employees  were  re- 
ported as  having  their  weekly  hours  of  employment 
reduced  an  average  of  61/2  hours,  irrespective  of  overtime. 
As  a  consequence  of  these  developments  the  hours  of 
labor  in  an  ordinary  working  week  in  the  principal  indus- 
tries are  now  generally  44  to  48  as  compared  with  48  to 
60  in  former  years.  The  miners  secured  the  7-hour 
day,  and  were  promised  the  6-hour  day.  France,  Ger- 
many, Denmark,  Norway,  Sweden,  Spain,  and  many  other 
countries  followed  the  example  of  Great  Britain  in  intro- 
ducing the  8-hour  day.  There  has  been  some  reaction 
since  1919,  but  the  ultimate  triumph  of  the  shorter  work- 
day is  practically  assured  in  Europe. 

Conclusions. — Rapid  progress  towards  the  8-hour  day 
is  being  made  by  organized  workers  in  every  country, 
and  by  unorganized  employees  in  those  plants  where  an 
enlightened  labor  policy  has  been  adopted.  For  the  great 
mass  of  unskilled,  unorganized  laborers,  however,  the 
length  of  the  working-day  is  still  a  serious  problem.  Even 
the  achievement  of  the  basic  8-hour  day  will  not 
dispose  of  the  deleterious  effects  of  excessive  hours  in- 
cident to  overtime,  Sunday  labor,  continuous  shifts,  and 
night  work.  These  are  fundamental  elements  in  the  prob- 
lem of  hours  of  employment  which  must  be  given  con- 
sideration. What  is  needed  is  not  a  basic  8-hour  day 
but  an  actual  8-hour  day  with  an  adequate  wage  scale 


Hours  of  Labor  119 

which  will  do  away  with  the  necessity  for  overtime,  except 
in  emergencies,  and  the  reduction  of  night  and  Sunday 
work  to  a  minimum. 


SELECTED  REFERENCES 

COMMONS,  J.  R.,  AND  ANDREWS,  J.  B.,  Principles  of  Labor  Legis- 
lation, revised  edition,  1920,  Chap.  V. 
BAUER,  STEPHAN,   The  Road  to  the  Eight-Hour  Day,  Monthly 

Labor  Review,  9 :41-65,  Aug.,  1919. 
GOLDMARK,  JOSEPHINE,  Fatigue  and  Efficiency,  1912,  Chaps.  Ill, 

V,  VI  and  XI. 

GOMPERS,  SAMUEL,  Labor  and  the  Employer,  1920,  Chap.  IV. 
GREAT  BRITAIN,  MINISTRY  OP  LABOR,   Labor   Gazette,   27:319, 

Aug.,  1919. 
LAUCK,  W.  J.,  AND  STDENSTRICKER,  EDGAR,  Conditions  of  Labor 

in  American  Industries,  1917,  Chap.  V. 
TEAD,  ORDWAT,  AND  METCALP,  H.  C.,  Personnel  Administration, 

1920,  Chap.  VII. 

UNITED  STATES  BUREAU  OP  LABOR  STATISTICS,  Bulletin  249,  1919. 
UNITED  STATES  BUREAU  OP  LABOR  STATISTICS,  Monthly  Labor 

Review,  9:194-199,  Nov.,  1919. 
UNITED  STATES  COMMISSION  ON  INDUSTRIAL  RELATIONS,  Final 

Report,  1916,  p.  69. 

UNITED  STATES  PUBLIC  HEALTH  SERVICE,  Bulletin  106,  1920. 
WEBB,  SIDNEY,  AND  WEBB,  BEATRICE,  Industrial  Democracy,  1920, 

Chap.  VI. 


CHAPTER  VIII 
CHILD  LABOR 

The  Problem. — Children  have  always  been  more  or  less 
important  in  the  economic  life  of  peoples,  but  it  was  not 
until  the  era  of  the  modern  factory,  with  its  power  ma- 
chinery and  machine  processes,  that  their  labor  was  made 
marketable  in  competition  with  that  of  men  and  women 
and  their  employment  gave  rise  to  a  serious  economic  and 
social  problem.  Industrial  and  commercial  expansion  led 
to  severe  competition  for  foreign  markets  as  an  outlet 
for  surplus  products,  and  the  demand  for  cheap  labor 
became  insistent.  It  was  to  the  advantage  of  capitalistic 
nations  to  keep  the  cost  of  production  as  low  as  possible, 
in  order  to  market  successfully  the  products  of  their 
industries.  There  existed  a  large  reserve  of  child  labor 
marketable  at  low  wages,  a  supply  which  could  be  easily 
exploited  if  the  machinery  of  production  could  be  ad- 
justed to  the  physical  capacity  of  youthful  workers.  Im- 
provement in  technical  processes  of  production  and  the 
introduction  of  easily  operated  machines,  requiring  little 
skill  and  no  great  amount  of  physical  strength,  soon  made 
it  possible  to  employ  this  practically  untouched  supply 
of  cheap  labor.  Thus  the  child  worker  was  introduced 
to  modern  industrialism,  and  his  exploitation  at  once  con- 
stituted one  of  the  many  evils  incident  to  capitalistic 
production. 

The  employment  of  children  in  industry  is  a  phase  of 
the  general  problem  of  child  welfare  involving  far-reaching 
physical,  moral,  mental,  and  economic  effects.  Employ- 
ment of  children  in  modern  industry  prevents  normal 
physical  and  mental  development.  The  period  of  school- 
ing is  cut  short  by  the  necessity  of  entering  industry,  and 
the  confinement  and  strain  of  industrial  life  are  likely 

120 


Child  Labor  121 

to  injure  the  child  permanently.  The  undeveloped  mus- 
cular and  nervous  systems  are  unable  to  resist  the  wear 
and  tear  of  toil,  and  fatigue  soon  sets  in.  It  has  been 
found  that  children  are  much  more  liable  to  industrial 
accidents  and  more  susceptible  to  occupational  diseases 
than  adults.  Experience  has  also  shown  that  child  labor 
and  delinquency  are  intimately  related,  and  that  the  child 
who  enters  industry  at  an  early  age  is  likely  to  feel  his 
economic  importance  and  to  become  less  amenable  to 
parental  discipline. 

A  no  less  important  aspect  of  the  child-labor  problem 
is  its  economic  effect,  the  most  serious  phase  of  which 
is  the  displacement  of  adults  by  child  workers.  "Child 
labor  must  be  counted  as  one  of  the  most  important  causes 
of  unemployment  among  adults.  For  some  particular 
processes  young  persons  are  preferred  to  adults  because 
of  greater  nimbleness  or  manual  dexterity;  but  the  prin- 
cipal cause  which  leads  to  their  employment  in  the  place 
of  grown  persons  is  probably  the  lower  wage  at  which 
they  can  be  hired."1  Depression  of  the  wage  scale  is 
one  of  the  serious  by-products  of  child  labor.  Investiga- 
tions have  shown  that  where  child  labor  is  common  the 
earnings  of  adults  tend  to  fall  off,  so  that  the  additional 
earnings  resulting  from  child  labor  do  not  materially  in- 
crease the  total  income  of  the  family. 

It  should  not  be  understood  that  all  child  labor  is  in- 
jurious. There  is  an  element  of  truth  in  the  conception 
that  prevailed  among  our  Puritan  ancestors  that  a  certain 
amount  of  employment  is  likely  to  prove  beneficial  to 
the  average  child.  The  confinement  of  the  modern  fac- 
tory, the  hours  of  monotonous  toil,  and  the  denial  of  oppor- 
tunities for  education  and  pleasure  which  rightfully 
belong  to  childhood  are  the  factors  which  make  the  em- 
ployment of  children  a  menace.  In  determining  the 
gravity  of  the  problem,  therefore,  certain  fundamental 
inquiries  arise.  Is  the  child  worker  able  to  reach  maturity 
with  his  health  and  physical  vitality  unimpaired!  Does 
the  child  who  enters  industry  at  an  early  age  receive 

1 U.  8.  Industrial  Commission,  Final  "Report,  Vol.  XIX,  p.  91& 


122  Child  Labor 

training  that  will  conduce  to  his  efficiency  as  an  adult 
worker?  Does  employment  of  a  child  preclude  the  amount 
of  education  necessary  to  equip  him  for  the  enjoyment 
of  rights  and  the  performance  of  duties  bestowed  upon 
the  citizen  in  a  democracy? 

Development  of  the  Problem  in  England. — Even  in  its 
beginnings  modern  industrialism  resulted  in  irreparable 
injuries  to  children.  Long  hours  of  work,  insufficient 
wages,  overexertion,  lack  of  educational  opportunities, 
forced  deprivation  of  pleasures  that  belong  to  youth,  and 
exposure  to  degenerating  influences  were  among  the  many 
evils  that  prevailed  during  the  early  years  of  the  factory 
system.  Scarcity  of  labor  was  a  problem  for  the  early 
factory  owners  of  England.  The  dependence  of  the 
mills  upon  water-power  made  it  necessary  to  build  them 
upon  the  rapid  streams  in  the  remote  parts  of  Yorkshire, 
Lancashire,  Derbyshire,  and  Nottinghamshire,  where 
population  was  not  great.  Moreover,  the  people  in  these 
sections  of  England  did  not  manifest  a  disposition  to 
work  in  factories.  The  northwest  part  of  the  country, 
where  the  new  industries  were  being  established,  did  not 
afford  an  adequate  supply  of  adult  labor.  There  existed, 
however,  an  abundant  supply  of  child  labor  which 
hitherto  had  not  been  exploited.  The  parish  poor-farms 
and  workhouses  in  large  cities  were  overcrowded  with 
children  who,  upon  becoming  of  age,  were  unable  to 
secure  employment.  Manufacturers  were  quick  to  avail 
themselves  of  this  supply,  and  a  nefarious  system  of  ap- 
prenticeship soon  emerged. 

Employers  signed  indentures  or  contracts  with  the  over- 
seers of  the  poor,  under  the  terms  of  which  they  agreed 
to  furnish  board,  clothing,  and  instruction  to  the  child 
apprentices  for  a  certain  number  of  years.  In  return  for 
these  considerations  the  children  were  put  to  work  in  the 
factories.  Children  from  seven  years  of  age  upward  were 
assembled  in  large  numbers,  from  London  and  other  cities, 
to  operate  the  spinning  machines  in  the  factories  of  the 
northwest  of  England.  The  youthful  workers  were 
quartered  in  apprenticeship  houses  constructed  in  the 


Child  Labor  123 

vicinity  of  the  workshops.  Housing  conditions  were 
wretched,  hours  of  labor  were  excessive,  and  supervision 
was  often  inhuman.  During  periods  of  great  industrial 
activity  child  workers  were  organized  in  two  shifts,  each 
working  twelve  hours,  one  during  the  day  and  one  at 
night.  When  there  was  no  night  work  the  day  turn  was 
longer.  Children  were  driven  to  their  labor  by  task- 
masters. Their  food  was  of  the  poorest  quality,  and  they 
were  frequently  compelled  to  eat  while  at  work,  in  order 
that  the  machines  they  tended  might  not  be  stopped. 
Time  that  should  have  been  used  for  resting  was  spent 
in  cleaning  machinery.2  "The  beginning  of  the  present 
century  [nineteenth]  found  children  of  five  and  even  of 
three  years  of  age  in  England  working  in  factories  and 
brick-yards ;  women  working  underground  in  mines,  har- 
nessed with  mules  to  carts,  drawing  heavy  loads;  found 
the  hours  of  labor  whatever  the  avarice  of  the  individual 
mill  owners  might  exact,  were  it  thirteen,  fourteen,  or 
fifteen ;  found  no  guards  about  machinery  to  protect  life 
and  limb;  found  the  air  of  the  factory  fouler  than 
language  can  describe,  even  could  human  ears  bear  to 
hear  the  story."3 

The  dangers  to  health  became  greater  as  congestion  of 
factory  workers  increased.  Child  workers  were  helpless 
to  protect  themselves  against  the  avarice  of  employers, 
and  the  ignorance  and  selfishness  of  unwise  parents.  Al- 
though the  public  conscience  was  gradually  aroused  to 
the  social  and  moral  consequences  of  this  unrestricted 
exploitation  and  waste  of  childhood,  the  problem  con- 
tinued to  be,  acute  because  of  the  powerful  individualism 
of  the  period,  which  looked  askance  at  any  proposed 
restrictions  of  individual  liberty  in  industry.  Destructive 
economic  practices  have  often  been  condoned  because  they 
have  been  defended  and  justified  by  the  economic 
philosophy  of  the  times.  This  is  as  true  to-day  as  it  was  then. 
More  than  a  half  century  passed  before  there  was  general 

*E.  P.  Cheyney,  Industrial  and  Social  History  of  England,   1901 
edition,  p.  247. 
•F.  A.  Walker,  Political  Economy,  p.  381. 


124  Child  Labor 

acceptance  of  the  doctrine  that  the  state  has  both  a  right 
and  a  duty  to  protect  the  physical  and  moral  well-being 
of  its  people,  particularly  its  children. 

Rise  of  the  Problem  in  the  United  States. — In  the  United 
States  the  factory  system  had  scarcely  begun  when  the 
famous  inventions  of  the  power  loom,  the  spinning  jenny, 
the  spinning  mule,  and  the  steam  engine  came  into  use. 
For  some  time,  therefore,  America  escaped  many  of  the 
glaring  evils  that  had  made  their  appearance  in  the  indus- 
trial life  of  the  mother  country  as  a  result  of  the  Indus- 
trial Revolution.  Our  development  was  evolutionary 
rather  than  revolutionary  in  character.  This  was  the 
result  of  many  causes,  but  especially  of  the  fact  that  the 
new  machinery  was  introduced  very  slowly  into  American 
industrial  life.  There  are  many  reasons  also  why  our 
early  industrial  activities  did  not  produce  the  exploita- 
tion of  women  and  children  that  prevailed  in  England. 
American  manufacturers  benefited  by  the  experiences 
of  the  English,  and  frequently  introduced  more  desirable 
conditions  into  their  better-equipped  factories.  The  im- 
mense natural  wealth  of  America,  the  abundance  of  free 
land,  and  the  extraordinary  mobility  of  the  working  popu- 
lation afforded  opportunities  for  escape  from  any  indus- 
trial conditions  that  might  seem  disadvantageous.  Such 
conditions  were  not  conducive  to  widespread  employment 
of  children,  since  the  head  of  the  household  could  provide 
adequately  for  his  family.  Moreover,  in  some  localities, 
as  Lowell,  Massachusetts,  employment  conditions  were 
said  to  be  ideal. 

As  the  economic  life  of  America  developed,  the  small 
factory  gave  way  to  the  larger  establishment,  the  intimate 
relations  that  had  obtained  between  employers  and  em- 
ployees began  to  disappear,  and  standards  of  employment 
were  lowered.  Child  labor  soon  gained  favor,  even  among 
so-called  respectable  and  philanthropic  persons.  The 
introduction  of  child  laborers  into  our  early  factories 
was  the  logical  result  of  (1)  the  colonial  conception  of 
the  social  value  of  child  labor;  (2)  the  provisions  of  the 
poor  laws  which  sought  to  prevent  children  from  becom- 


Child  Labor  125 

ing  public  charges;  and  (3)  the  desire  of  manufacturers 
for  a  supply  of  cheap  labor.  The  propriety  of  child  labor 
was  scarcely  questioned;  indeed,  it  became  a  virtue  to 
rescue  children  from  the  demoralization  of  idleness. 
Methods  of  dealing  with  pauper  children  reflected  the 
influence  of  the  mother  country.  The  extent  of  appren- 
ticeship and  the  conditions  that  attended  it  in  colonial 
communities  are  not  known  exactly.  After  careful 
examination  of  historical  evidence,  Miss  Abbott  suggests 
that  "the  work  was  in  some  cases  very  heavy,  and  the 
treatment  severe  and  unkind  .  .  .  although  conditions 
varied  greatly  according  to  the  character  of  the  master 
and  his  home."  The  children  were  not  necessarily  taught 
a  trade.  In  all  probability  the  evils  of  early  child  labor 
in  this  country  were  not  so  great  as  those  incident  to 
the  modern  factory,  but  evidence  indicates  that  children 
from  eight  to  fourteen  years  of  age  were  employed,  and 
that  women  and  children  frequently  constituted  the  total 
working  force.4 

It  was  commonly  believed  that  these  children  would 
find  in  industry  protection  from  the  vice  and  immorality 
of  idleness.  In  1789  the  petition  for  the  first  cotton 
factory,  at  Beverly,  Massachusetts,  was  based  partly  on 
the  ground  that  it  would  "  afford  employment  to  a  great 
number  of  women  and  children  many  of  whom  would 
be  otherwise  useless  if  not  burdensome  to  society."  A 
contemporary  witness  testified  to  the  fact  that  all  of  the 
operatives  in  the  first  complete  cotton  factory  in  Rhode 
Island,  built  by  Samuel  Slater,  the  "father  of  American 
manufactures,"  were  between  seven  and  twelve  years  of 
age.  In  his  "Report  on  Manufactures"  Alexander  Hamil- 
ton called  attention  to  the  usefulness  of  children  in  indus- 
try. It  was  a  common  argument  that  the  work  of 
manufacture  could  best  be  accomplished  by  children.  The 
high  cost  of  adult  male  labor  was  undoubtedly  responsible 

4 In  this  whole  discussion  of  early  child  labor  the  author  baa  drawn 
freely  upon  Miss  Kdith  Abbott 'a  excellent  article,  "A  Study  of  the 
Early  History  of  Child  Labor  in  America,"  which  appeared  in  the 
American  Journal  of  Sociology,  Vol.  XIV,  pp.  15-37. 


126  Child  Labor 

for  this  conception  of  the  productivity  of  youth.  Since 
no  complete  statistics  are  available,  it  is  impossible  to 
determine  the  extent  of  child  labor  in  the  early  period. 
That  it  tended  to  increase  there  can  be  no  doubt,  since 
there  was  practically  no  regulation  of  the  employment  of 
children. 

Subsequent  to  the  Civil  War  children  became  an  in- 
creasingly important  factor  in  American  industries.  No 
statistics  of  the  number  of  children  engaged  in  gainful 
occupations  in  the  United  States  were  compiled  preceding 
1870,  but  the  census  of  that  year  showed  that  739,164 
children  between  10  and  15  years  of  age  were  employed, 
of  whom  114,628  were  in  manufacturing  plants.  In  1880, 
according  to  the  census,  1,118,356  children  from  10  to  15 
years  of  age  were  employed,  or  16.8  per  cent  of  all  in 
that  age  group.  This  means  that  during  the  decade  the 
number  of  gainfully  employed  children  increased  almost 
59  per  cent.  In  1900  the  number  of  gainfully  employed 
children  was  1,750,178,  or  18  per  cent  of  the  age  group 
between  10  and  15  years,  indicating  an  increase  of  56  per 
cent  over  the  total  for  1880. 

Recent  Growth  of  Child  Labor. — According  to  the 
census  statistics  of  1910  there  were  1,990,225  children 
of  both  sexes  in  the  age  group  of  10  to  15  years,  who 
were  engaged  in  gainful  occupations.  These  youthful 
workers  constituted  almost  12  per  cent  of  all  persons 
employed  in  agricultural  work  and  a  little  over  2  per 
cent  of  the  persons  engaged  in  employments  other  than 
agriculture.  Of  all  the  children  gainfully  employed, 
895,946  were  under  14  years  of  age,  while  of  those  be- 
tween the  ages  of  10  and  13,  609,030  were  boys  and 
286,946  were  girls.  Out  of  the  total  of  1,990,225  employed 
children  under  16  years,  1,353,139  were  boys  and  637,086 
were  girls. 

Such  information  as  is  available  suggests  that  the  num- 
ber of  children  under  16  years  of  age  employed  in  gainful 
occupations  was  diminishing  during  the  years  just  pre- 
ceding the  outbreak  of  the  European  War  in  1914.  In 
1909  there  were  19  cities  in  which  children  under  16  years 


Child  Labor  127 

of  age  constituted  4  per  cent  or  over  of  the  wage-earners 
employed  in  factories,  whereas,  in  1914,  there  were  only 
8  cities  of  this  class.  The  average  number  of  wage-earners 
under  16  years  in  factories,  in  cities  with  a  population 
of  10,000  or  over,  was  98,528  in  1909,  and  72,870  in  1914, 
an  average  decline  of  25,658,  or  somewhat  over  26  per 
cent.6  These  statistics  were  gathered  during  a  period  of 
depression  and  may  not,  therefore,  be  a  true  index  of  the 
status  of  child  labor. 

The  outbreak  of  the  war  in  Europe  soon  created  an 
unprecedented  demand  for  American  products,  particu- 
larly of  munitions.  Beginning  with  the  autumn  of  1915 
a  rapid  rise  began  in  the  number  of  children  entering 
gainful  occupations,  and  heavy  increases  were  recorded 
practically  everywhere  for  1916  and  1917.  The  increase 
in  1916  over  1915  in  the  number  of  children  taking  out 
employment  certificates  in  certain  large  cities  ranged 
from  14  per  cent  in  Baltimore  to  400  per  cent  in  Lowell, 
Massachusetts.  After  the  United  States  entered  the  war 
the  number  continued  to  increase.  Among  the  conditions 
responsible  for  this  were  (1)  the  rapid  rise  in  the  cost 
of  living;  (2)  the  absence  of  male  supporters  of  the 
family  who  were  in  military  service;  (3)  attractive  wages 
offered  by  employers;  and  (4)  the  spirit  of  adventure 
growing  out  of  the  excitement  of  war.  Business,  indus- 
try, and  agriculture  drew  heavily  upon  child  labor.  In 
New  Hampshire,  for  example,  the  number  of  children 
between  14  and  16  years  employed  in  the  chief  factory 
towns  increased  119  per  cent  in  1917  over  1916,  and  58.7 
per  cent  in  1918  over  1917.  In  Washington,  District  of 
Columbia,  there  was  an  increase  of  more  than  163  per 
cent  in  the  fiscal  year  1917-1918  over  1916-1917,  largely 
because  of  the  demand  for  child  workers  in  government 
offices.* 

Following  the  armistice  there  was  a  decrease  in  the 
number  of  children  entering  industry,  owing  to  the  shut- 

*  Abstract  of  the  Census  of  Manufactures,  1914,  pp.  285,  286. 
•Nettie  P.  McOill,  "Trend  of  Child  Labor  in  the  United  States, 
to  1920,"  Monthly  Labor  Review,  April,  1921,  pp.  1-14. 


128  Child  Labor 

ting  down  of  war  industries,  the  return  of  military  forces 
to  civilian  occupations,  and  the  uncertainty  of  the  busi- 
ness outlook.  In  many  places  there  was  a  temporary 
increase  in  child  labor  in  1919,  owing  to  the  continued 
increase  in  the  cost  of  living  and  the  lure  of  attractive 
wages  for  children.  Beginning  with  the  late  summer  of 
1920  there  occurred  a  depression  in  business  and  industry 
which  tended  to  retard  the  movement  of  children  into 
gainful  occupations.  It  is  significant,  however,  that 
whereas  the  population  of  a  certain  group  of  representa- 
tive cities  of  the  United  States  is  estimated  to  have  in- 
creased on  the  average  14  per  cent  between  1913  and  1920, 
the  increase  of  children  receiving  employment  certificates 
during  the  same  period  in  these  cities  was  13.4  per  cent. 
While  accurate  statistics  are  not  available,  it  is  likely 
that  in  the  several  states  represented  by  these  cities  child 
labor  has  kept  pace  with  the  increase  in  population.  It 
is  essential  to  remember  that  children  who  receive  employ- 
ment certificates  are  supposed  to  be  legally  employed. 
If  data  concerning  illegally  employed  children  could  be 
secured,  there  is  reason  to  believe  that  the  problem  of 
child  labor  would  manifest  even  more  serious  aspects. 

From  this  brief  historical  survey  of  child  labor  several 
conclusions  may  be  drawn.  (1)  The  child-labor  problem 
is  the  joint  product  of  the  conception  that  child  employ- 
ment is  beneficial,  and  the  rise  of  the  factory  system 
following  the  Industrial  Revolution.  (2)  Commercial  in- 
centives have  tended  to  replace  moral  reasons  for  the 
employment  of  children.  (3)  Child  workers  have  been 
an  important  factor  in  the  industrial  development  of 
capitalistic  nations.  (4)  During  periods  of  industrial 
prosperity,  when  adult  labor  is  relatively  scarce,  employers 
tend  to  draw  heavily  upon  child  labor.  (5)  During  periods 
of  high  prices  children  are  forced  into  industry  because 
of  the  high  cost  of  living,  which  makes  it  imperative  to  sup- 
plement the  earnings  of  the  father  with  the  meager  earn- 
ings of  children.  (6)  Child  labor  in  modern  factories 
often  results  in  serious  physical,  social,  moral,  and 
economic  consequences. 


Child  Labor  129 

The  Occupations  of  Children. — Children  enter  almost 
every  kind  of  industry  in  which  their  unskilled  labor  and 
their  limited  physical  strength  can  be  applied  successfully. 
In  mercantile  establishments,  the  various  branches  of 
manufacture,  and  in  agriculture,  the  child  worker  has 
become  a  significant  factor.  According  to  the  federal 
census  of  1910,  17,000  boys  under  16  years  of  age  were 
working  in  coal  and  iron-ore  mines  and  quarries,  of  which 
about  2,200  were  between  the  ages  of  10  and  13  years. 
Children  under  16  years  were  found  in  the  greatest  num- 
bers in  the  clothing  industry,  shoe  factories,  bakeries, 
candy  factories,  hat,  collar,  shirt  and  cuff  establishments, 
slaughtering  and  meat-packing  houses,  blast  furnaces  and 
steel  mills,  printing  and  publishing  plants,  cotton  mills, 
telegraph  and  telephone  service,  banking  and  brokerage 
houses,  cigar  and  tobacco  factories,  and  silk,  knitting,  and 
woolen  mills.  The  greatest  proportion  were  employed  in 
mercantile  establishments  and  textile  mills.  In  the  cotton 
industry  in  some  southern  states  children  have  often  con- 
stituted approximately  one-fourth  of  the  total  number  of 
employees.  A  recent  examination  of  employment  cer- 
tificates of  7,147  children  between  the  ages  of  14  and  16, 
in  Connecticut,  showed  that  5,342,  or  74.7  per  cent,  were 
first  employed  in  manufacturing  and  mechanical  indus- 
tries; 1,233,  or  17.3  per  cent,  in  trades;  and  the  remainder 
in  transportation,  personal  and  domestic  service,  and 
other  occupations.  Among  the  manufacturing  and  me- 
chanical industries  the  metal  industry  ranked  first,  with 
2,068  children  employed;  textile  manufacturing  was 
second,  with  1,498,  and  the  clothing  industry  third,  with 
616.T  A  study  of  child  labor  in  Waltham,  Massachusetts, 
showed  that  65  per  cent  of  the  children  who  left  school 
entered  manufacturing  establishments,  while  13.5  per  cent 
entered  mcrcantilf  establishments. 

The  employment  of  children  in  industrial  homework 
has  for  a  long  time  been  a  source  of  deep  concern  to  thoso 
who  are  interested  in  the  protection  of  childhood.  The 

«R.  M.  Woodbury,  "  Industrial  Instability  of  Child  Workers,"  U. 
8.  Children 'a  Bureau,  Bulletin  No.  74,  p.  16. 


130  Child  Labor 

manufacture  of  artificial  flowers,  the  shelling  of  nuts,  the 
manufacture  of  cheap  jewelry  and  similar  products  lend 
themselves  readily  to  child  labor  and  homework.  A  recent 
study  made  by  the  United  States  Children's  Bureau  in 
three  Rhode  Island  cities  revealed  what  may  be  considered 
typical  conditions  of  the  employment  of  children  in  home 
industries.  It  was  found  that  a  considerable  number 
of  children  between  5  and  15  years  of  age — in  all,  nearly 
5,000,  or  8  per  cent  of  the  children  of  this  age  group — 
had  done  factory  work  in  their  homes,  either  by  hand  or 
machine,  at  some  time  during  the  year  1918.  The  bureau 
found  that  nearly  100  different  kinds  of  work  were  per- 
formed by  children,  the  occupations  including  the  carding 
of  snaps  and  shoe  buttons;  assembling  of  various  kinds 
of  jewelry;  stringing  of  beads;  clipping,  stringing,  and 
scalloping  lace ;  pasting  or  stitching  chenille  dots  on  veils ; 
finishing  underwear;  and  many  other  simple  operations 
incidental  to  manufacture.  Many  of  the  children  under 
14  years  of  age  used  machines  in  these  operations,  and 
worked  under  conditions  that  were  very  undesirable. 
Three-fifths  of  the  employers  interviewed  stated  that  if 
industrial  homework  should  be  abolished  it  would  not  be 
difficult  for  them  to  make  the  necessary  readjustments  in 
their  business.8 

It  is  a  matter  of  general  knowledge  that  children  do 
considerable  work  on  American  farms.  Almost  three- 
fourths  of  the  working  children  of  the  United  States  be- 
tween 10  and  15  years  of  age,  or  more  than  one-eighth 
of  the  total  child  population  of  these  ages,  are  said  to  be 
laboring  in  gainful  occupations  unregulated  by  state  or 
federal  child  labor  laws.  The  greatest  proportion  of  these 
children — approximately  one  million  and  a  half,  accord- 
ing to  the  census  of  1910 — are  engaged  in  some  form  of 
agriculture.  In  1915  about  5,000  children  between  the 
ages  of  6  and  15  years  were  engaged  in  beet-raising  in 
Colorado,  and  in  1919  children  below  the  age  of  10  years 
were  working  in  the  cotton  fields  of  Texas  and  Oklahoma, 

.  'Eighth  Annual  Report  of  the  Chief,  U.  8.  Children's  Bureau, 
1920,  p.  23. 


Child  Labor  131 

in  the  tobacco  fields  of  Kentucky,  the  beet  fields  of 
Colorado,  and  on  thousands  of  farms  throughout  the 
United  States.9  The  effect  of  unregulated  farm  labor  on 
the  physical  and  mental  development  of  the  child  has 
not  been  determined  specifically.  It  is  generally  agreed 
that  such  labor  is  not  so  deleterious  as  employment  in 
factories  and  home  industries,  but  that  the  benefits  are 
not  so  numerous  as  are  supposed.  Premature  and  exces- 
sive work  on  the  farm  often  results  in  loss  of  educational 
opportunities  and  may  interfere  with  the  child's  normal 
growth.  "Wherever  rural  child  labor  is  greatest  we  find 
the  highest  percentage  of  illiteracy  and  the  largest  pro- 
portion of  children  not  attending  school. "  10  The  problem 
of  rural  child  labor  is  most  serious  in  frontier  and  newly 
settled  sections  of  the  country,  as  throughout  the  north- 
west and  far  western  states,  and  on  the  truck  farms  tilled 
by  recent  immigrants. 

The  Wages  of  Child  Workers. — General  information 
concerning  the  wages  of  child  workers  is  difficult  to  ob- 
tain, but  available  statistics  indicate  that  they  are  paid 
miserably  low  wages.  Official  reports  put  the  average 
weekly  earnings  of  a  child  at  about  $3.46.  The  United 
States  Department  of  Labor  found  that  the  wages  of 
children  between  12  and  14  years  of  age  in  southern  cot- 
ton mills  were  between  $3.54  and  $5.04  weekly.  A  study 
of  youthful  workers,  14  to  19  years  of  age,  in  Waltham, 
Massachusetts,  a  few  years  ago  when  earnings  were 
generally  high,  showed  that  32.1  per  cent  received  $5 
or  more  weekly,  in  their  first  employment;  35.7  per  cent 
received  from  $4  to  $4.99 ;  and  32.1  per  cent  received  less 
than  $4.n  Other  federal  investigations  have  shown  that 
children's  earnings  average  about  $3.00  a  week.  In  con- 
nection with  the  study  of  industrial  homework  in  Rhode 
Island  cities,  it  was  found  that  in  the  majority  of  cases 
the  earnings  of  the  children  had  contributed  very  little 

•See  Ruth  Mclntire,  Children  in  Agriculture,  Pamphlet  No.  284, 
National  Child  Labor  Committee,  March,  1919. 

10  Ibid.,  p.  24. 

11  Monthly  Labor  Review,  February,  1918,  p.  148. 


18$  Child  Labor 

to  the  family  income,  although  homework  had  been  re- 
sorted to  on  account  of  the  inadequacy  of  the  father's 
wages  to  maintain  the  family.  The  average  earnings  per 
family  from  homework  in  1918  was  only  $48,  of  which 
children  contributed  a  small  amount,  since  over  half  of 
thejn  were  able  to  earn  at  a  maximum  the  sum  of  five 
cents  an  hour.  A  recent  study  of  working  children  under 
16  years  of  age,  in  Boston,  indicated  that  about  three- 
fourths  of  the  children  interviewed  received  less  than  $5 
initial  weekly  wages  in  their  first  employment;  5.1  per 
cent  received  less  than  $3 ;  and  68.4  per  cent  earned  from 
$3  to  $5.12  Everywhere  the  evidence  supports  the  conclu- 
sion that  the  earnings  of  children  in  industry  are  so  small 
as  to  add  very  little  to  the  family  income  and  are  by  no 
means  compensatory  for  the  physical,  moral,  and  intel- 
lectual losses  resulting  from  premature  employment. 

Conditions  of  Employment. — When  we  turn  to  the  con- 
ditions under  which  children  are  employed  in  industry, 
the  problem  is  no  less  acute.  This  is  especially  true  where 
children  are  engaged  in  industrial  homework.  Working 
children  are  frequently  forced  to  toil  long  hours,  par- 
ticularly where  state  laws  are  inadequate  or  their  enforce- 
ment is  lax.  Where  children  are  employed  in  sweatshops 
in  the  manufacture  of  clothing,  artificial  flowers,  feathers, 
neckties,  cigars,  et  cetera,  whether  in  the  factory  or  in 
the  home,  hours  of  labor  and  conditions  of  work  are  any- 
thing but  desirable.  In  busy  seasons  the  work-day  is 
painfully  long,  and  the  strength  and  vitality  of  the  youth- 
ful workers  are  taxed  to  the  utmost. 

In  the  absence  of  strict  law  enforcement  children  have 
been  found  working  eleven  or  twelve  hours  a  day  and 
about  sixty-six  hours  a  week.  In  a  recent  federal  study 
of  children  in  industrial  homework  it  was  found  that 
many  of  the  children  worked  not  only  after  school  hours 
but  also  in  the  evening,  and  some  worked  exclusively  at 
night.  A  small  number  of  children  who  were  employed 
regularly  during  the  day  in  factories  or  stores  also  worked 

12  Ibid.,  January,  1921,  pp.  45-59. 


Child  Labor  133 

at  home  every  night."  Moreover,  much  of  this  work  was 
carried  on  under  conditions  dangerous  to  the  health  of 
the  consuming  public,  communicable  diseases  being  prev- 
alent in  the  homes  of  the  workers.  Diphtheria,  typhoid 
fever,  eczema,  tuberculosis,  and  syphilis  were  among  the 
diseases  found  in  the  homes  where  children  were  em- 
ployed.14 Night  work  is  even  a  greater  evil  for  child 
workers,  since  long  hours  of  night  labor  are  accompanied 
by  insufficient  rest  during  the  day.  Even  in  states  that 
are  noted  for  progressive  laws  and  law  enforcement,  there 
is  a  tendency  to  violate  the  legal  provisions  as  to  hours 
of  labor.  Too  long  daily  hours  and  too  long  weekly, 
hours  are  found.  A  study  of  several  thousand  cases  of 
child  workers  showed  that  in  over  one-sixth  of  all  the 
positions  held  the  provisions  of  the  law  relating  to  daily 
hours  of  work  were  violated,  and  in  about  one-seventh 
those  relating  to  weekly  hours  were  violated.  Also,  where 
excessive  daily  and  weekly  hours  prevailed,  children  were 
frequently  employed  at  night  and  occasionally  were  re- 
quired to  work  seven  days  a  week.16 

The  Instability  of  Child  Workers.  —  Child  labor  is  gener- 
ally supposed  to  be  cheap  labor,  when  in  reality  it  is  often 
expensive  labor.  From  the  standpoint  of  the  nation  all 
child  labor  is  expensive  because  of  the  evils  that  result 
therefrom.  Employers,  however,  do  not  always  stop  to 
consider  either  the  social  or  economic  waste  involved  in 
the  excessive  employment  of  children  under  sixteen  years 
of  age.  The  cost  of  labor  turnover,  which  is  always  high 
among  child  workers,  is  seldom  calculated.  The  length 
of  time  which  a  child  worker  remains  in  one  position  is 
important  from  the  standpoint  of  both  the  social  and  the 
economic  value  of  the  child. 

Numerous  experiences  indicate  that  the  rate  of  turn- 
over among  children  is  exceptionally  high.  A  study  of 
7,147  child  workers  in  Connecticut  showed  that  these  chil- 

11  Chief  of  U.  8.  Children  '•  Bureau,  op.  cit.,  p.  23. 


•Helen  8.  Woodbury,  "Working  Children  of  Boston,"  Monthly 
Labor  Review,  January,  1921,  pp.  45-69. 


134  Child  Labor 

dren  had  held  14,826  positions,  of  which  8,867  were  held 
by  4,000  boys  and  5,959  by  3,147  girls.  The  data  indicated 
that  there  is  a  strong  tendency  to  an  early  change  from 
the  first  position,  either  on  account  of  the  peculiar 
psychology  of  the  child  or  the  opportunity  for  economic 
improvement.  Over  one-third  of  the  children  whose  work 
histories  had  lasted  at  least  twenty-one  months  left  their 
first  positions  within  three  months,  and  over  one-half  had 
left  by  the  ninth  month  of  work.  Of  child  workers,  girls 
are  manifestly  more  stable  than  boys.  Only  12y2  per  cent 
of  the  girls  left  the  first  position  within  the  first  month, 
while  18  per  cent  of  the  boys  left  within  that  period. 
Four-tenths  of  the  boys,  as  contrasted  with  three-tenths 
of  the  girls,  left  within  three  months.  Over  one-half  of 
the  boys  had  left  before  the  end  of  the  sixth  month,  while 
the  percentage  for  the  girls  did  not  reach  one-half  until 
somewhat  over  nine  months  of  work.  Only  30  per  cent 
of  the  children  who  commenced  work  between  14  and 
14  years  and  3  months  remained  in  the  first  position  for 
more  than  a  year  and  nine  months.16  This  experience  is 
typical  of  those  in  other  sections  of  the  country.  Cor- 
poration experiences  generally  show  that  there  is  a  tend- 
ency among  child  workers  to  shift  from  job  to  job  and 
that  this  tendency  is  even  more  pronounced  in  the  case 
of  boys. 

Unemployment  Among  Children. — What  has  just  been 
said  concerning  the  turnover  of  child  workers  suggests 
that  unemployment  is  likely  to  be  relatively  high  among 
them.  It  is  a  common  occurrence  for  a  child  not  to  find 
immediately  a  position  which  is  exactly  to  his  liking  or 
for  which  he  is  adapted  either  by  temperament  or  natural 
ability.  These  difficulties  arise  even  with  adult  laborers, 
and  are  naturally  more  prevalent  among  children  who 
have  had  little  or  no  experience  in  industry  or  business. 
The  problem  of  unemployment  is  obviously  not  so  serious 
as  in  the  case  of  adults,  except  where  the  child's  income 
is  the  chief  source  of  support  for  the  family.  Yet,  the 
fact  that  children  may  lose  a  great  deal  of  time  through 

"  E.  M.  Woodbury,  op.  tit.,  p.  108. 


Child  Labor  135 

unemployment  makes  their  earnings  that  much  less 
adequate. 

A  study  of  unemployment  among  a  certain  group  of 
children  in  Boston  showed  that  the  proportion  of  unem- 
ployed time  was  14.4  per  cent.  The  highest  percentage  of 
unemployment  for  any  sex  and  nativity  group  was  22.9,  for 
the  native  girls  of  native  fathers,  evidently  the  result 
of  a  tendency  to  work  only  when  the  more  attractive  posi- 
tions were  offered  them.  Among  " steady"  child  workers, 
or  those  who  held  one  position  for  a  year  or  more 
of  their  work  history,  the  percentage  of  unemployment 
was  only  2.7;  among  "active"  child  workers,  or  those 
who  held  one  position  six  months  or  one  year,  the  per- 
centage rose  to  15.1;  in  the  case  of  "restless"  workers, 
or  those  who  held  positions  an  average  of  three  to  six 
months,  unemployment  amounted  to  20  per  cent;  and 
in  the  case  of  "unsteady"  workers,  or  those  who  held 
one  position  on  an  average  less  than  three  months,  the 
percentage  was  34.9."  Other  investigations  have  un- 
covered similar  conditions  of  unemployment  among  wage- 
earning  children.  As  the  child  acquires  business  or  in- 
dustrial experience  he  is  likely  to  secure  a  position  with 
which  he  is  fairly  well  satisfied,  become  reconciled  to  the 
rigid  discipline  of  industry,  develop  greater  efficiency, 
and  settle  down  to  steady  work.  Inadequate  industrial 
education  and  the  lack  of  proper  vocational  guidance  are 
factors  partly  responsible  for  the  high  percentage  of  labor 
turnover  and  unemployment  among  youthful  workers. 
Children  who  leave  school  between  14  and  16  years  of 
age  are  not  fitted  for  industry,  having  received  no  special 
training  for  the  occupations  they  enter,  and  only  in  a 
few  cases  where  children  are  "learning  the  business"  does 
industry  attempt  to  make  the  necessary  adaptations  to 
child  workers.  Industrial  depression,  unscientific  methods' 
of  industrial  organization,  the  restless  nature  of  the  child 
worker,  and  the  lack  of  experience  and  ability  are  con- 
tributory causes  of  widespread  unemployment  among 
children. 

*  Helen  8.  Woodburj,  op.  eit.,  pp.  8,  9. 


136  Child  Labor 

Accidents  and  Sickness.— Ever  since  the  problem  of 
child  labor  first  attracted  the  attention  of  social  reformers, 
the  pertinent  question  has  been  asked  whether  the  child 
worker  is  likely  to  grow  into  adult  life  with  his  health 
and  physical  vigor  unimpaired.  Experience  has  proved 
that  children  are  more  liable  to  accidents  and  more  sus- 
ceptible to  occupational  diseases  than  are  adults.  Incom- 
plete development  of  muscular  and  nervous  systems  means 
that  the  child  has  only  a  minimum  power  of  resistance 
to  the  poisonous  substances  and  injurious  dusts  to  which 
he  is  exposed  in  many  industries.  A  recent  examination 
of  employment  certificates  in  Boston  showed  that  nearly 
one  child  in  every  twelve  had  suffered  some  accident  since 
taking  his  first  regular  position,  and  that  seven-tenths  of 
the  accidents  occurred  while  the  children  were  at  work.18 
Another  investigation  showed  that  boys  under  16  had 
twice  as  many  accidents  as  the  adults,  and  the  girls  under 
16,  three  times  as  many  accidents  as  the  women.19 
In  the  cotton  mills  of  the  South  the  accident  rate  for 
children  was  more  than  double  that  for  employees  over 
16  years  of  age.20  In  eight  factories  in  England  the 
accident  rate  among  the  boys  (those  under  18  years  of 
age)  exceeded  by  50  per  cent  the  rate  for  men  over  41 
years  of  age.21  Carelessness  of  children  in  handling 
dangerous  machinery  is  a  prominent  cause  of  the  greater 
percentage  of  accidents  among  them.  The  child  worker 
will  venture  blindly  into  numerous  hazards  to  health  and 
limb,  which  are  carefully  avoided  by  all  save  reckless 
adults.  The  child's  inexperience  in  handling  machinery 
and  the  employer's  failure  to  safeguard  it  are  other 
responsible  factors. 

Industrial  physicians  are  agreed  that  adolescence  pre- 
sents an  exceptionally  serious  crisis  for  children  who  enter 
industry  and  that  child  workers  have  received  but  little 
consideration  in  industrial  sanitation.  It  is  estimated 

"Helen  S.  Woodbury,  op.  cit.,  p.  11. 

19  U.  S.  Industrial  Commission,  Final  Report,  Vol.  XIX,  pp.  917, 
918. 

"'National  Child  Labor  Committee,  Pamphlet  No.  243. 

M  U.  S.  Bureau  of  Labor  Statistics,  Bulletin  No.  230,  pp.  146,  147. 


Child  Labor  137 

that  three-fourths  of  the  young  people  16  years  of  age 
leave  school  for  employment,  and  one-fifth  of  those  14 
and  15  years  of  age.  The  greatest  development  of  physical 
power  is  said  to  take  place  between  the  ages  of  15  and 
19,  the  most  rapid  gains  being  made  between  16  and  18 
years  of  age.  Various  investigations  in  Europe  and  the 
United  States  show  a  high  rate  of  sickness  between  the 
ages  of  15  and  20,  and  a  high  death  rate  prevails  in  this 
country  among  young  persons  employed  in  cotton  mills 
and  in  the  printing  industry.  Thus,  during  a  period  of 
crucial  and  extensive  physical  and  mental  changes, 
fatigue  and  overexertion  incident  to  industrial  work  often 
lead  to  collapse  resulting  in  physical  incompetence  and 
economic  dependence.  The  great  acceleration  of  growth 
in  height  and  weight  and  of  motor  power  and  function 
during  adolescence  is  impeded  by  excessive  toil.22 

Economic  Effects  of  Child  Labor. — It  has  long  been 
recognized  that  the  labor  of  children  may  be  marketed 
in  severe  competition  with  the  labor  of  men  and  women. 
Some  people  have  designated  this  as  the  most  serious 
effect  of  child  labor.  There  are  three  ways  in  which  the 
employment  of  children  may  result  in  competition  with 
adult  workers :  (1)  Adult  workers  may  be  displaced  and 
thrown  out  of  employment;  (2)  the  conditions  of  labor 
may  be  demoralized;  and  (3)  the  wages  of  adult  workers 
may  be  lowered.  In  unskilled  occupations  or  where  easily 
operated  machines  have  been  introduced,  child  labor  has 
resulted  in  displacement  of  adult  labor.  The  competition 
of  children  with  men  and  women  workers  on  the  labor 
market  inevitably  tends  to  depress  the  general  level  of 
wages.  An  investigation  by  the  federal  Department  of 
L;i I iur  showed  that  of  a  number  of  children  under  16  years 
who  left  school  to  go  to  work,  90  per  cent  entered  indus- 
tries in  which  the  wages  of  adults  were  $10  a  week  or 
less.  Many  other  investigations  have  shown  that  tho 
family  income  is  not  greatly  increased  by  the  earnings 

*  Harold  H.  Mitchell,  "Tho  Need  for  Special  Health  Protection 
of  Employed  Adolescents, ' '  American  Journal  of  Public  Health, 
November,  1981,  pp.  978-978. 


138  Child  Labor 

of  children,  on  account  of  the  fact  that  the  competition 
of  youthful  workers  depresses  the  earnings  of  adults.  In 
certain  textile  mills,  for  example,  the  United  States  In- 
dustrial Commission  found  that  where  women  and  chil- 
dren worked  the  earnings  of  the  entire  family  were  no 
greater  than  in  industries  in  the  same  state  where  only 
men  were  employed.  Because  child  workers  cannot  bar- 
gain collectively,  employers  find  it  easy  to  extend  the 
hours  and  to  neglect  the  physical  conditions  of  employ- 
ment. Child  labor,  moreover,  has  been  classified  as  one 
of  the  important  causes  of  unemployment  among  adult 
workers.  In  the  period  of  general  unemployment,  1921-1922, 
the  Secretary  of  Labor  stated  that  one  and  a  half  million 
more  jobs  for  adults  would  be  available  to  relieve  the 
unemployment  situation,  if  child  labor  in  the  United 
States  were  eliminated.  On  both  economic  and  social 
grounds  the  Secretary  protested  against  the  practice  of 
working  children  in  the  heartless  maw  of  factories,  mines, 
and  quarries,  and  on  farms. 

Reasons  for  the  Employment  of  Children. — Child  labor 
is  difficult  to  justify,  but  its  causes  are  easily  determined 
when  one  remembers  that  the  major  emphasis  of  modern 
industrialism  is  upon  profits.  Employers  excuse  the  em- 
ployment of  children  on  the  grounds  that  labor  is  scarce, 
production  costs  must  be  lowered,  the  difficulties  of  sea- 
sonal fluctuations  cannot  be  surmounted  in  any  other  way, 
needy  families  must  be  assisted,  and  custom  has  made 
child  labor  an  integral  part  of  the  industrial  system.  None 
of  these  reasons  can  be  accepted  as  valid  in  a  progressive 
community,  since  child  welfare  must  not  be  sacrificed  to 
selfish  gain. 

Many  conditions  have  contributed  to  the  general  employ- 
ment of  children  in  every  country.  (1)  The  introduction 
of  easily  operated  machinery.  Technical  improvement* 
have  made  it  possible  to  use  the  limited  strength  and  energy 
of  the  child  in  the  operation  of  machines  and  the  per- 
formance of  many  services  in  modern  industry.  (2)  The 
economic  pressure  of  inadequate  family  income.  The  losi 
of  the  main  support  of  the  family  and  the  rapid  rise  in 


Child  Labor  139 

the  cost  of  living  have  been  prominent  causes  of  child  labor. 
A  recent  study  of  child  welfare  in  a  coal-mining  community 
showed  that  over  half  of  the  children  between  thirteen 
and  sixteen  years  of  age  had  worked.  This  included  two- 
thirds  of  the  boys  and  one-third  of  the  girls  of  these  ages. 
Of  the  children  who  worked  regularly,  one-third  of  the 
boys  and  over  one-fourth  of  the  girls  started  to  work  before 
they  were  fourteen  "  'Family  need'  was  the  reason  most 
frequently  given  for  leaving  school  and  going  to  work, 
and  the  proportion  of  children  who  had  left  school  for  work 
was  greater  as  the  father's  income  was  less.  The  number 
of  wage-earners  in  the  family,  including  the  number  of 
child  wage-earners,  decreased  as  the  father's  earnings  in- 
creased." Over  one-half  of  all  the  fathers  or  heads  of 
households  earned  less  than  $1,250  a  year.  The  average 
best  day's  pay  was  between  $4  and  $5,  but  nearly  three- 
fourths  of  the  fathers  who  reported  had  periods  of  unem- 
ployment during  the  year.  Besides  unemployment,  acci- 
dents were  an  important  factor  in  family  distress,  almost 
one-fifth  of  all  the  fathers  working  in  the  mines  having 
met  with  accidents  at  their  work  within  the  three  and  one- 
half  years  preceding  the  inquiry.28  Moreover,  as  the  cost 
of  living  rises  children  are  forced  'to  enter  industry  to  help 
maintain  the  family.  (3)  Weaknesses  in  the  educational 
system.  School  curriculums  have  not  been  adjusted  to  the 
needs  of  the  child,  with  the  consequence  that  children  leave 
school  long  before  they  should.  An  investigation  of  child 
labor  in  Waltham,  Massachusetts,  showed  that  50  per  cent 
of  the  children  went  to  work  because  of  dislike  for  school, 
backwardness  in  studies,  or  trouble  with  the  teachers.  Over 
one-third  gave  economic  necessity  as  the  primary  reason 
for  leaving  school,  about  one-tenth  gave  preference  for 
work  as  the  reason,  and  about  5  per  cent  stated  that  it 
was  their  parents'  wish  that  they  go  to  work.  About  76  per 
cent  of  the  children  turned  their  entire  earnings  into  the 
family  pocketbook.24  (4)  The  child's  desire  for  economic 

•Eighth   Annual  Report  of  the  Chief,  U.  8.  Children '•  Bureau, 
1920,  p.  22. 
*  Monthly  Labor  Bcview,  February,  1918,  pp.  148,  150. 


140  Child  Labor 

independence.  It  has  been  found  that,  among  the  wage- 
earning  classes  especially,  children  have  a  strong  desire  to 
escape  the  discipline  and  economic  dependence  of  school 
days  and  to  enter  industry  where  they  can  earn  money  and 
become  " their  own  bosses. "  (5)  The  desire  of  employers 
for  cheap  labor.  Employers  are  interested  primarily  in 
profits,  and  the  notion  prevails  that  child  labor  is  a  means 
of  reducing  production  costs.  In  periods  of  great  indus- 
trial activity  when  adult  labor  is  scarce  and  expensive, 
employers  are  not  reluctant  to  violate  the  law  in  order  to 
employ  children.  (6)  The  ignorance  and  avarice  of 
parents.  Many  parents  look  upon  children  as  a  source 
of  income  rather  than  as  a  social  responsibility.  This 
conception  prevails  among  the  immigrants  from  eastern 
and  southern  Europe,  and  there  is  no  doubt  that  the 
presence  of  large  numbers  of  immigrant  children,  whose 
labor  is  marketable  at  low  wages,  has  tended  to  stimulate 
the  employment  of  children  in  American  industries. 

The  Loss  of  Educational  Opportunity. — Over  a  million 
youths  enter  industrial  life  in  the  United  States  every 
year,  the  larger  proportion  of  them  without  special 
preparation  for  the  tasks  of  industrial  and  business  voca- 
tions. The  Commission  on  National  Aid  to  Vocational 
Education  reported  in  1914  that,  on  the  average,  the 
schools  carry  their  pupils  as  far  as  the  fifth  grade,  but 
in  some  cities  great  numbers  leave  before  attaining  that 
grade.  The  school  term  in  rural  districts  is  usually  shorter 
than  in  the  urban  centers.  The  average  rural  school  term 
,  in  the  United  States  is  140  days,  while  the  average  city 
term  is  180  days.  Nonattendance  at  school  has  been  com- 
mon in  many  states  among  children  who  work  on  farms. 
It  is  estimated  that  the  average  child  in  rural  districts 
goes  to  school  only  a  little  more  than  half  the  time  the 
schools  are  in  session.  In  Colorado  nonattendance  was 
found  to  be  most  common  among  the  children  of  immi- 
grant beet  workers,  who  missed  more  than  three  and 
one-half  times  as  many  days  as  the  other  children  in  the 
first  three  months  of  school.  A  similar  situation  was 
found  in  Kentucky  and  Oklahoma,  and  doubtless  exists 


Child  Labor  141 

in  many  other  states.  In  rural  Oklahoma  there  were  in 
1916  over  289,000  children  enrolled  in  the  schools,  of 
whom  only  57.2  per  cent,  on  the  average,  attended  daily. 
"The  reason  is  not  far  to  seek.  In  this  state  children  of 
five  years  are  already  cotton  pickers,  and  boys  of  eleven 
are  all-around  farmers,  able  to  plow  and  to  pick  their 
share  of  cotton  a  day.  Many  children  are  kept  out  of 
school  to  herd  cattle,  to  cultivate  asparagus,  and  to  do 
all  the  thousand  and  one  odd  jobs  that  occur  on  a  farm."  25 
Retardation  in  studies  is  the  inevitable  result  of  such 
practices. 

The  loss  of  education  resulting  from  child  labor  is 
irreparable.  The  child  enters  industry  poorly  equipped 
and  frequently  unable  to  seize  opportunities  for  advance- 
ment; he  is  likely  to  remain  in  a  blind-alley  occupation, 
and  his  efficiency  as  an  adult  worker  is  impaired.  More- 
over, the  child  worker  is  deprived  of  those  higher  educa- 
tional opportunities  which  are  necessary  to  prepare  him 
for  the  assumption  of  the  responsibilities  of  citizenship. 
The  child  who  must  enter  industry  at  an  early  age  is 
denied  the  privilege  of  developing  his  mental  faculties 
for  the  full  appreciation  of  the  larger  cultural  values  of 
life  that  are  rightfully  his  heritage  in  a  democratic 
country. 

Moral  Aspects  of  the  Problem, — Entering  industry 
without  a  vocation,  in  fifty  per  cent  of  the  cases  probably 
with  no  more  education  than  schooling  up  through  the 
sixth  grade  affords,  children  constitute  a  menace  not  only 
to  the  national  standards  of  economic  efficiency,  but  also 
to  the  morai  standards  of  a  civilized  people.  "The  em- 
ployment of  children  under  fourteen  pauperizes  the 
parents  and  enforces  illiteracy  upon  the  children.  It  is 
one  of  the  most  prolific  causes  of  poverty,  pauperism, 
vice,  and  crime  in  adult  years,  and  is,  in  fact,  a  grave 
menace  to  the  peace  and  prosperity  of  the  social  order,"  M 
Children  that  enter  industry  prematurely  often  go  the 
round  of  ill-health,  industrial  inefficiency,  low  wages,  un- 

"  Ruth  Mclntire,  op.  dt.,  p.  10. 

"Adams  and  bumner,  Labor  Problems,  p.  06. 


142  Child  Labor 

employment,  and  poverty.  Economic  distress  and  poverty 
in  turn  increase  child  labor. 

Juvenile  delinquency  increased  rapidly  during  the 
World  War,  and  while  this  increase  cannot  be  attributed 
entirely  to  the  greater  employment  of  children,  it  is 
generally  believed  that  there  was  a  close  connection  be- 
tween the  two.  An  examination  of  the  records  of  the 
Manhattan  branch  of  the  children's  court,  covering  1,792 
children  (1,628  boys  and  164  girls),  revealed  some  per- 
tinent facts  regarding  the  relation  between  employment 
and  child  delinquency.  The  first  conclusion  drawn  was 
that  working  children  were  unduly  numerous  among  the 
offenders.  Of  the  boys  614,  or  37.7  per  cent,  and  of  the 
girls  68,  or  41.5  per  cent,  had  been  employed  previous  to 
their  arrest.  It  was  estimated  that  about  ten  per  cen! 
of  the  children  between  7  and  16  years,  resident  in  the 
Borough  of  Manhattan,  were  employed  during  1916. 

An  analysis  of  the  nature  of  the  offenses  showed  that 
the  working  children,  who  are  estimated  to  form  ap- 
proximately one-tenth  of  the  population  aged  7  to  16, 
furnished  about  four-tenths  (36.8  per  cent)  of  the 
offenders  charged  with  serious  wrong-doing,  while  thd 
nonworking  nine-tenths  furnished  a  trifle  over  six-tenths 
of  the  serious  offenders  (63.2  per  cent).  Among  the 
recidivist  or  repeating  offenders  the  working  children 
were  numerous,  the  percentage  being  much  higher  pro- 
portionately among  them  than  among  the  nonworking 
children.  Of  the  552  recidivists,  48  per  cent  came  from 
the  working,  and  52  per  cent  from  the  nonworking  boys. 
In  the  proportion  of  offenders  coming  from  their  ranks, 
in  the  proportion  committing  serious  offenses,  and  in  the 
proportion  of  recidivists  the  working  children  com- 
pared unfavorably  with  the  nonworking  children.  Theft 
was  the  leading  offense  among  the  boys,  accounting  for 
47  per  cent  of  the  total  number  of  cases,  while  incor- 
rigibility  and  disorderly  conduct  were  second,  being 
responsible  for  35.6  per  cent  of  the  cases.  Of  the  total 
number  of  614  boys  at  work,  39  per  cent  were  delivery, 
errand,  and  wagon  boys,  and  23.8  per  cent  were  news- 


Child  Labor  143 

boys;  the  remainder  were  distributed  among  factories, 
street  trades,  offices,  stores,  and  markets. 

The  investigating  committee  concluded  that  it  would 
be  absurd  to  claim  that  all  working  children  become 
delinquents,  and  that  there  are  undoubtedly  individual 
cases  where  the  shift  from  school  to  industry  has  proved 
the  making  of  the  boy,  but  that  in  general  the  evidence 
is  massed  on  the  other  side.  It  has  been  found  that  child 
labor  contributes  not  only  to  juvenile  delinquency  but 
also  to  idleness  and  shiftlessness  of  adult  wage-earners. 
Many  adult  wage-earners  would  not  be  idle  if  the  children 
did  not  make  a  contribution  to  the  family  income. 

Minimum  Standards  of  Employment. — Certain  mini- 
mum standards  for  children  entering  employment  have 
been  set  forth  by  such  agencies  as  the  United  States 
Children's  Bureau.  The  following  minima  are  desirable 
bases  for  immediate  legislation,  but  experience  will  doubt- 
less prescribe  even  more  progressive  requirements.  (1) 
Age  limits.  No  child  under  16  years  of  age  should  be 
employed  in  any  occupation,  although  exemptions  may  be 
granted  in  the  case  of  children  between  the  ages  of  14 
and  16  employed  in  agriculture  or  domestic  service  during 
vacation  periods,  until  schools  are  continuous  throughout 
the  year.  Employment  in  and  about  mines  and  quarries 
should  not  be  open  to  minors  under  18  years  of  age,  while 
the  minimum  age  limit  of  21  years  might  well  be  adopted 
for  messenger  services.  No  child  should  be  employed  in 
any  occupation  which  is  obviously  dangerous  to  health  and 
which  retards  physical  and  moral  development.  (2) 
Educational  requirements.  All  children  between  the  ages 
of  7  and  16  should  be  required  to  attend  school  for  at  least 
9  months  each  year;  those  between  16  and  18  who  have 
finished  the  eighth  grade  but  have  not  completed  the  high 
school  curriculum,  and  who  have  entered  industry  or  any 
occupation,  should  attend  a  day  continuation  school  for  at 
least  8  hours  a  week;  children  of  these  ages  who  have  not 
completed  such  schooling  and  are  not  regularly  employed 
should  be  required  to  attend  a  full-time  day  school.  Special 
occupational  training  must  be  provided  for  retarded  and 


144  Child  Labor 

subnormal  children.  (3)  Physical  fitness.  No  child  should 
be  permitted  to  enter  any  occupation  until  his  physical 
fitness  and  normal  development  have  been  affirmed  by  a 
competent  medical  officer  intrusted  with  the  administration 
of  this  important  matter.  Moreover,  there  should  be  a  semi' 
annual  or  annual  physical  examination  of  all  working 
children  who  are  under  18  years  of  age.  (4)  Hours 
of  employment.  The  maximum  hours  of  employment 
for  children  under  16  years  of  age  should  be  8  in 
each  day  and  44  in  each  week,  while  for  those  between 
the  ages  of  16  and  18  the  working-day  should  be  less  than 
the  legally  prescribed  hours  for  adults.  Time  spent  in  con- 
tinuation schools  should  be  counted  as  a  part  of  the  child 's 
working-day.  No  minor  should  be  allowed  to  work  between 
the  hours  of  6  p.  m.  and  7  a.  m.  (5)  Minimum  wage.  Every 
child  employed  in  any  occupation  should  be  paid  a  wage 
adequate  to  maintain  the  desired  degree  of  respectability, 
comfort,  and  decency  in  a  progressive  community.  In  no 
case  should  child  workers  be  sacrificed  to  the  avarice  of 
employers.  During  periods  of  apprenticeship  special  ad- 
justments in  compensation  may  be  allowed,  but  both  the 
period  of  learning  and  the  pay  should  be  controlled  by  a 
minimum  wage  commission  or  a  similar  official  body.  (6) 
Placement  and  employment  supervision.  An  adequate, 
centralized  agency  for  vocational  guidance  of  children 
should  be  established,  a  placement  bureau  organized  to 
assist  minors  in  finding  suitable  employment,  and  con- 
tinued supervision  exercised  over  child  workers  during 
the  first  years  of  employment.27 

Conclusions. — The  history  of  child  labor  is  replete  with 
evidence  of  the  tendency  of  employers  to  exploit  child 
workers  in  the  absence  of  adequate  legal  regulation,  The 
eradication  of  the  evils  resulting  from  the  employment 
of  children  is  a  primary  duty  of  a  civilized  community. 
No  child  should  enter  industry  or  agriculture  prematurely 
and  thus  be  deprived  of  the  opportunity  for  proper  phys- 
ical, moral,  and  mental  development.  National  progress 
is  inconceivable  apart  from  adequate  protection  of  the 

"Beport  of  the  Chief,  U.  8.  Children's  Bureau,  1919,  pp.  247,  248. 


Child  Labor  145 

nation's  youths  from  the  avarice  of  those  who  value 
profits  above  human  life.  The  conditions  that  make  child 
labor  necessary  and  possible  should'  be  eliminated  in  the 
interest  of  social  welfare  and  progress. 


SELECTED  REFERENCES 

ABBOTT,  EDITH,  A  Study  of  the  Early  History  of  Child  Labor 
in  America,  American  Journal  of  Sociology,  14:15-37. 

ABBOTT,  EDITH,  Women  in  Industry,  1910. 

ADAMS,  T.  S.,  AND  SUMNER,  H.  L.,  Labor  Problems,  1905, 
Chap.  II. 

CARLTON,  F.  T.,  The  Ilistory  and  Problems  of  Organized  Labor, 
revised  edition,  1920,  Chap.  XIV. 

CHEYNEY,  E.  P.,  An  Introduction  to  the  Industrial  and  Social 
History  of  England,  revised  edition,  1920. 

CLEVELAND,  F.  A.  (editor),  Democracy  in  Reconstruction,  1919, 
Chap.  IX. 

COOKE-TAYLOR,  R.  W.,  The  Modern  Factory  System,  1891, 
Chap.  V. 

COMMONS,  J.  R.,  AND  ANDREWS,  J.  B.,  Principles  of  Labor  Legis- 
lation, revised  edition,  1920,  Chap.  V. 

KKLLOK,  F.  A.,  Out  of  Work;  a  Study  of  Unemployment,  1915, 
Chap.  III. 

NATIONAL  CHILD  LABOR  COMMITTEE,  NEW  YORK  CITY,  Publica- 
tions. 

UNITED  STATES  BUREAU  OP  LABOR  STATISTICS,  Monthly  Labor 
Review,  12:1-14,  April,  1921. 

UNITED  STATES  BUREAU  OF  LABOR  STATISTICS,  Bulletin  175,  Sum- 
mary of  Senate  Document  645,  Report  on  Conditions  of 
Women  and  Child  Wage-earners  in  the  United  States,  1916. 

UNITED  STATES  CHILDREN'S  BUREAU,  Bulletin  60,  1919,  Sections  I, 
II  and  III. 

UNITED  STATES  CHILDREN'S  BUREAU,  Bulletin  74,  1920 ;  Bulletin 
79,  1921. 

WEBB,  BEATRICE,  The  Case  for  the  Factory  Acts,  second  edition, 
1902,  pp.  192-223. 


CHAPTER  IX 

WOMEN  IN  INDUSTRY 

Woman  as  an  Economic  Factor, — From  the  very  be- 
ginning of  economic  evolution,  women  have  been  an  im- 
portant factor  in  the  industrial  progress  of  races;  indeed, 
during  the  earlier  stages  of  economic  development  women 
were  the  primary  producers,  since  men  devoted  them- 
selves largely  to  warfare  and  the  chase.  In  the  handicraft 
stage,  manufacturing  activities  centered  around  men, 
but  women  have  always  constituted  an  integral  part  of  the 
factory  system.  The  changed  methods  of  production  re- 
sulting from  the  introduction  of  power  machinery  have 
been  responsible  for  the  increasing  employment  of  womerf 
in  industry.  This  significant  economic  change  has  had 
several  far-reaching  effects:  (1)  The  labor  of  women,  like 
the  labor  of  men  and  children,  was  utilized  henceforth 
under  conditions  of  employment  not  subject  to  their  con- 
trol; (2)  women  entered  the  labor  market  as  wage-earners 
in  competition  with  men ;  and  (3)  the  shifting  of  production 
from  the  home  to  the  factory  has  had  many  deleterious 
effects  on  women  workers  and  family  life. 

There  is  nothing  fundamentally  objectionable  about  the 
employment  of  women;  their  right  to  employment  is  as 
valid  as  men's,  and  they  may  contribute  relatively  as 
much  to  national  progress.  In  the  case  of  women  workers, 
however,  there  are  certain  physiological  and  social  con- 
siderations which  cannot  be  disregarded,  and  which  dif- 
ferentiate their  position  in  industry  from  that  of  men. 
The  future  welfare  of  the  race  is  so  peculiarly  dependent 
upon  the  health  of  women  that  unless  their  employment 
in  industry  is  protected  adequately,  society  is  bound  to 
suffer  serious  consequences.  This  situation,  coupled  with 
the  fact  that  women  may  enter  into  competition  with  men 

146 


Women  in  Industry  147 

and  so  depress  wage  scales  and  conditions  of  work,  makes 
the  employment  of  women  in  modern  industry  an  im- 
portant economic  and  social  question.  The  problem  is  not 
to  prevent  the  employment  of  women  in  commercial,  in- 
dustrial, and  professional  fields,  but  rather  to  safeguard 
the  conditions  under  which  they  are  employed,  and  to 
eliminate  the  necessity  of  employing  mothers  whose 
services  in  the  home  may  be  far  more  valuable  to  society. 
Economic  necessity  impels  women  to  find  work,  and  they 
must  go  where  the  opportunity  for  employment  presents 
itself.  It  is  futile  to  insist  that  "woman's  place  is  in  the 
home."  The  modern  home  does  not  provide  productive 
employment  for  all  women,  nor  is  domestic  service  par- 
ticularly attractive  to  the  average  individual.  Even  with 
the  insufficient  wages  and  undesirable  conditions  that  pre- 
vail, an  increasing  number  of  women  are  finding  in  indus- 
try and  business  greater  opportunities  for  self-develop- 
ment and  economic  independence  than  obtain  in  the  home. 
Recent  studies  of  women  in  industry  indicate  that  the 
contraction  of  domestic  service  as  a  field  of  women's 
employment  shows  signs  of  permanency,  on  account  of 
the  unwillingness  of  women  to  return  to  it  under  prewar 
conditions.  New  fields  of  employment  are  constantly 
opening  up  to  women  workers. 

The  Growth  of  the  Employment  of  Women. — In  the 
United  States,  as  in  other  countries,  women  have  been 
responsible  in  a  significant  degree  for  industrial  expan- 
sion. While  the  total  number  of  women  employed  in 
industry  in  this  country  during  the  early  period  of  our 
development  cannot  be  determined  accurately,  there  is 
sufficient  evidence  of  the  fact  that  over  a  hundred  indus- 
trial occupations  were  open  to  women.1  In  the  first  half 
of  the  nineteenth  century  women  entered  factories  in 
increasing  numbers.  Female  operatives  in  the  early  cot- 
ton mills  were  Americans,  and  were  often  the  daughters 
of  farmers,  tradesmen,  teachers,  and  preachers  who  lived 
in  the  neighborhood  of  the  factories.  In  some  parts 
of  the  country  conditions  of  labor  were  desirable, 

1  Edith  Abbott,  Women  in  Industry,  pp.  66,  et  scq. 


148  Women  in  Industry 

but  in  other  sections  they  were  far  from  attractive 
and  the  working-day  was  excessively  long.  Little  atten- 
tion was  paid  to  the  problem  because  the  majority  of 
workers  were  not  looking  to  industry  as  a  life-long  em- 
ployment. As  yet,  no  factory  class  had  developed  and 
the  women  employees,  for  the  most  part  young  and  am- 
bitious to  earn  as  much  as  possible  in  a  short  period  of 
months  or  years,  endured  the  hardships  of  bad  factory 
conditions  and  long  hours  with  little  complaint. 

In  the  years  immediately  preceding  the  Civil  War  im- 
migration to  the  United  States  increased  to  such  an  extent 
that  the  available  supply  of  labor  was  augmented  ma- 
terially, conditions  of  labor  were  depressed,  and,  as  a 
consequence,  relatively  fewer  women  entered  industry. 
The  availability  of  a  greater  supply  of  man-power  fur- 
nished an  incentive  to  introduce  heavier  machinery  and 
faster  processes  which  demanded  more  strength  and 
nervous  energy  than  women  possessed.  In  "Women  in 
Industry,"  Miss  Abbott  suggests  that  the  machinery 
would  have  been  adapted  to  the  employment  of  womerf 
had  male  labor  remained  scarce.  During  the  Civil  War 
a  large  number  of  women  were  thrown  upon  their  own 
resources,  with  the  result  that  they  again  entered  industry 
in  increasing  numbers.  New  fields  of  employment  were 
thrown  open  to  them  and  from  that  time  on  they  entered 
into  more  active  competition  with  men. 

Statistics  of  the  United  States  Census  indicate  the  in- 
creasing importance  of  women  in  industry.  In  1880  the 
total  number  of  females  ten  years  of  age  and  over  en- 
gaged in  gainful  occupations  was  2,647,157,  while  in  1900 
the  number  was  5,319,397,  or  more  than  twice  as  many 
as  on  the  earlier  date.  In  1900  there  were  28,246,384 
women  in  the  United  States  over  ten  years  of  age,  so 
that  about  19  per  cent  were  gainfully  employed,  as  com- 
pared with  approximately  15  per  cent  in  1880  and  13  per 
cent  in  1870.  In  1910  there  were  8,075,000  women  gain- 
fully employed,  an  increase  of  over  45  per  cent  for  the 
decade.  It  is  a  notable  fact  that  one-fifth  of  all  gainfully 


Women  in  Industry  149 

employed  persons  in  the  United  States  in  1910  were 
females.  While  the  number  of  women  workers  outside 
the  home  increased  about  45  per  cent,  the  increase  in 
the  number  of  men  workers  was  only  30  per  cent.  Of  the 
8,263,153  persons  reported  as  engaged  in  manufacturing 
industries  in  1914,  6,613,466,  or  80  per  cent,  were  males, 
and  1,649,687,  or  20  per  cent,  were  females. 

When  the  United  States  entered  the  war  in  1917,  there 
were  over  2,000,000  American  women  at  work  in  factories. 
The  number  of  gainfully  employed  women  in  the  United 
States  at  that  time  was  about  10,000,000.  Subsequent  to 
1917,  however,  an  additional  1,000,000  are  believed  to 
have  entered  gainful  occupations,  especially  manufactur- 
ing and  clerical  positions.  Approximately  100,000  teachers 
left  the  schools  for  clerical  and  other  positions  of  war 
work,  the  majority  going  to  Washington  and  other  At- 
lantic coast  cities.  An  industrial  survey  of  15  states 
showed  that  about  1,266,000  women  were  engaged  in  mak- 
ing war  supplies  in  the  United  States  in  January,  1918, 
100,000  of  whom  were  manufacturing  munitions.  Women 
were  placed  in  machine  shops,  automobile  factories,  rail- 
way repair  shops,  street  railway  service,  and  numerous 
other  occupations.  In  December,  1918,  the  manager  of 
the  Woman's  Service  Section  of  the  United  States  Rail- 
road Administration  stated  that  between  January  and 
October,  1918,  the  number  of  women  employed  by  the 
steam  railroads  had  increased  from  60,000  to  100,000. 
With  the  exception  of  building  and  construction  trades, 
women  were  placed  in  practically  every  industrial  occu- 
pation, and  especially  in  metal  and  machinery  work.1 

The  census  figures  for  1920  show  that  of  the  approxi- 
mately 42,000,000  persons  10  years  of  age  and  over  en- 
gaged in  gainful  occupations,  about  8,500,000,  or  20  per 
cent  were  females.  Not  all  the  women  who  entered  in- 
dustry during  the  war  period  remained,  but  there  is  every 

*8ee  the  author's  monograph,  Labor  Problems  and  Labor  Ad- 
ministration in  the  United  States  During  the  World  War,  pp.  68, 
et  teq. 


150  Women  in  Industry 

reason  to  believe  that  at  the  present  time  (1922)  fully 
12,000,000  women  are  in  gainful  occupations  in  the  United 
States.  In  the  light  of  such  figures  it  is  not  difficult  to 
appreciate  the  industrial  significance  of  women. 

Present-Day  Occupations  of  Women. — A  half-century 
of  industrial  progress  in  the  United  States,  whose  ex- 
perience has  not  differed  materially  from  that  of  other 
advanced  industrial  nations,  shows  that  women  have  en- 
tered practically  every  kind  of  occupation.  The  modern 
woman  is  invading  occupational  territory  hitherto  con- 
sidered the  special  province  of  man.  The  number  of 
occupations  and  professions  closed  to  women  is  diminish- 
ing with  unprecedented  rapidity ;  the  economic  emancipa- 
tion of  women,  like  their  political  equality,  is  destined  to 
be  one  of  the  notable  achievements  of  the  twentieth  cen- 
tury. There  is  not  an  industry  listed  in  the  United  States 
in  which  women  are  not  employed.  The  branches  of 
industry  employing  the  largest  proportion  of  women  in- 
clude chemical  works,  clothing  manufacture,  corset,  glove, 
and  hat  factories,  candy  factories,  clock,  watch,  and 
jewelry  factories,  paint  factories,  munition  and  fireworks 
establishments,  soap  factories,  the  manufacture  of  food 
products,  wagon  and  carriage  manufacture,  the  manu- 
facture of  leather  and  leather  products,  shoe  factories, 
box  factories,  printing  and  publishing  works,  the  manu- 
facture of  paper  products,  button  factories,  rubber  fac- 
tories, straw  factories,  laundries,  cotton,  knitting,  woolen, 
lace  and  embroidery,  linen,  silk,  and  carpet  mills.  The 
census  figures  show  that  more  than  one-half  of  the  workers 
in  textile,  bookbinding,  and  glove-making  trades  and  one- 
third  of  the  workers  in  the  canning  industry  are  women. 
Women  constitute  a  large  part  of  the  office  staffs  of 
banking  houses,  insurance  companies,  brokerage  offices, 
and  real  estate  firms.  More  than  one-sixth  of  the  total 
number  of  persons  employed  in  wholesale  and  retail  trade 
are  females,  while  women  and  girls  make  up  one-half 
of  the  workers  in  professional  service,  and  two-thirds  of 
those  in  domestic  service.  In  the  professions  the  gains 
of  women  are  nearly  balanced  by  the  gains  of  men.  There 


Women  in  Industry  151 

has  been  a  large  increase  of  women  in  trade  and  transpor- 
tation. 

The  Senate  investigation  of  conditions  of  women  and 
child  wage-earners  in  the  United  States  (1910-1913)  re- 
vealed the  significant  fact  that  of  twenty-three  industries 
in  seventeen  states  there  were  twelve  in  which  women 
formed  over  one-half  of  the  total  number  of  workers. 
In  1920  approximately  1,084,000  women  workers  were 
engaged  in  agricultural  pursuits,  and  1,930,000  in  manu- 
facturing and  mechanical  industries.  Fully  261,553  women 
are  operating  farms  totaling  25,798,400  acres,  averaging 
98.6  acres  to  the  farm.  The  percentage  of  farms  operated 
by  women  in  the  states  varies  from  1.9  per  cent  of  the 
whole  in  Nebraska  to  7.2  per  cent  in  Rhode  Island. 

About  one-third  of  the  wage-earners  of  New  York  State 
are  women.  Three  hundred  thousand  women  turn  the 
wheels  of  production  in  that  state,  and  some  industries 
are  known  as  women's  industries.  Women  are  the  back- 
bone of  garment  making,  knitted  goods  manufacture, 
candy  making,  and  the  paper  trades.  They  fill  the  ranks 
of  the  unskilled  and  semiskilled  in  large  plants  with 
standardized  products,  and  in  small,  low-grade  workshops 
in  large  cities.  A  survey  of  the  employment  of  women 
in  Minnesota  from  March,  1918,  to  December,  1919, 
showed  that  of  51,361  female  workers  included,  ap- 
proximately one-third  were  in  manufacturing  industries, 
one-fourth  in  mercantile  establishments,  one-eighth  in 
domestic  and  personal  service,  one-sixteenth  in  telephone 
and  telegraph  work,  and  one-fifth  in  all  other  industries. 
No  matter  in  what  state  or  section  of  the  country  one 
may  look,  statistics  everywhere  indicate  the  fact  suggested 
already ;  namely,  that  the  field  of  employment  for  women 
is  expanding  to  limits  undreamed  of  a  half-century 
ago. 

Competition  with  Men. — Male  workers,  especially  those 
who  are  organized,  are  prone  to  look  with  alarm  upon 
the  rapid  increase  in  the  number  of  female  wage-earners. 
Men  have  always  feared  the  consequences  of  competition 
with  women,  and  have  jealously  attempted  to  prevent  the 


152  Women  in  Industry 

influx  of  women  workers.  The  fact  that  women  are 
leaving  their  traditional  occupations — professional  and 
domestic  service — may  entail  serious  results  in  so  far  as 
the  employment  of  men  is  concerned.  There  appears  to 
be  little  ground  for  the  belief  that  women  actually  dis- 
place men  on  a  large  scale.  Some  displacement  occurs, 
but  during  the  period  of  industrial  expansion  in  the  last 
one  hundred  years,  women  have  been  employed  in  addi- 
tion to  men  rather  than  in  their  stead.  Women  frequently 
enter  into  direct  or  indirect  competition  with  men,  and 
their  employment  results  in  conditions  usually  deemed 
unacceptable  to  organized  labor.  Women  constitute  a 
fairly  elastic  labor  reserve,  tending  to  increase  when  wages 
are  attractive  and  to  diminish  when  the  wage  level  is 
lowered  in  periods  of  depression.  It  is  a  mistake,  how- 
ever, to  think  that  this  elasticity  is  such  as  to  furnish  a 
nice  adjustment  to  fluctuating  demands  for  labor.  Many 
women,  a  large  number  of  whom  are  married,  enter  in- 
dustry during  periods  of  business  prosperity  when  wages 
are  high  on  account  of  the  relative  scarcity  of  labor,  and 
withdraw  when  business  recession  sets  in  and  wages  drop. 
During  periods  of  depression,  however,  when  unemploy- 
ment prevails  and  wage  scales  are  generally  low,  many 
women  and  girls  are  forced  to  find  some  kind  of  employ- 
ment in  order  to  insure  support  of  the  family,  thus  glut- 
ting an  already  overcrowded  labor  market  and  causing 
further  decline  in  wage  standards.  Men  are  forced  to 
accept  lower  wages  or  surrender  their  jobs  to  women 
and  girls. 

The  danger  of  replacement  and  competition  of  male 
with  female  labor  is  apparently  more  serious  in  the  un- 
skilled than  in  the  skilled  trades.  In  occupations  de- 
manding a  large  degree  of  dexterity,  physical  strength', 
abundant  nervous  energy,  and  no  small  amount  of  special 
training,  women  have  offered  far  less  severe  competi- 
tion than  they  have  in  occupations  characterized  by 
repetitious  processes,  monotony,  unskilled  methods,  and 
small  demand  upon  physical  strength  and  nervous  energy. 
There  are  certain  departments  in  transportation,  such  aa 


Women  in  Industry  153 

the  operation  of  trains  and  steamships,  and  in  the  pro- 
duction of  steel,  in  which  extraordinary  skill,  training, 
and  strength  are  required.  The  male  workers  in  these 
occupations  have  little  to  fear  from  potential  or  actual 
competition  with  women.  It  is  thus  apparent  that  the 
influx  of  women  workers  into  industry  tends  to  swell  the 
number  of  those  whose  conditions  are  already  extremely 
undesirable  on  account  of  lack  of  skill  and  relatively  ex- 
cessive numbers.  As  machine  processes  break  down  the 
barriers  of  apprenticeship  the  competition  of  women  with 
men  has  serious  consequences. 

The  Wages  of  Women  in  Industry. — The  wages  of 
women  in  industry  are  pitiably  inadequate,  and  are  much 
below  the  remuneration  received  by  men  even  when  the 
work  performed  is  similar  in  nature.  "Women  work  in 
factories,  not  primarily  for  the  joy  of  working,  but  be- 
cause they  must  earn  a  living  for  themselves,  and  often 
for  others.  In  too  many  instances  they  have  had  neither 
joy,  nor  enough  earnings  for  a  living.  Managers  employ 
them  because  they  need  their  labor,  and,  often  because" 
they  want  it  cheap. ' ' 8  Low  remuneration  has  char- 
acterized the  employment  of  women  ever  since  they  as- 
sumed the  role  of  wage-earners,  and  prior  to  that  time 
their  economic  status  was  in  many  respects  even  less 
desirable.  This  condition  has  prevailed  for  centuries  in 
Europe,  and  it  has  also  been  a  characteristic  feature  of 
the  industrial  experience  of  the  United  States.  Reports 
of  the  movement  led  by  Matthew  Carey  against  low 
wages  in  Philadelphia  show  that  in  1828  sewing  women 
worked  16. hours  a  day  for  $1.25  a  week.  In  the  period 
of  the  Civil  War  an  increase  of  100  per  cent  in  men's 
wages  was  quite  common,  while  women's  wages  advanced 
about  20  per  cent,  but  in  some  cases  actually  decreased. 
In  1900,  the  wages  of  men  and  women  over  16  years  of 
age  showed  that  the  median  rate  of  wages  for  women  in 
all  industries  was  53  per  cent  of  the  rate  for  men.  A 
report  on  the  relative  wages  of  men  and  women  in  indus- 

•Mary  Van  Kleeck,  "Women  and  Machines/'  Atlantic  Monthly, 
February,  1921,  p.  255. 


154  Women  in  Industry 

try  in  England  indicated  that  in  1906  women's  wages 
on  the  whole  were  less  than  one-half  those  paid  to  men, 
and  that  during  the  World  War  women's  wages  rose  to 
about  two-thirds  of  those  paid  to  men. 

The  Federal  Census  of  Manufactures  in  1905  indicated 
that  of  588,000  women  employees  15  years  of  age  and 
over,  18.4  per  cent  were  receiving  under  $4  a  week;  49.8 
per  cent,  under  $6 ;  and  77.9  per  cent,  under  $8.  A  federal 
investigation  of  woman  and  child  wage-earners  (1910- 
1913)  covering  100,000  women  workers  16  years  of  age 
and  over  found  the  situation  unchanged.  Reports  of 
the  United  States  Immigration  Commission  in  1911  in- 
dicated that  of  57,712  women  workers  18  years  of  age 
and  over,  the  majority  of  whom  were  employed  in  cotton 
goods,  woolen,  and  worsted  manufacture,  5  per  cent  re- 
ceived under  $5  a  week;  45  per  cent,  less  than  $7.50;  and 
82  per  cent,  less  than  $10. 

A  survey  in  California  in  1915-1916  showed  that  a  large 
percentage  of  women  received  less  than  $10  a  week,  rang- 
ing from  48  per  cent  in  printing  and  bookbinding  to 
94  per  cent  in  5-10-15-cent  stores.  For  all  classes  of  in- 
dustry investigated,  an  average  of  53.3  per  cent  of  the 
women  received  less  than  $10  a  week,  although  this 
amount  was  accepted  as  the  minimum  necessary  to  cover 
the  cost  of  living.4  In  Minnesota,  during  1918-1919,  34 
per  cent  of  51,361  women  wage-earners  studied  were  below 
the  subsistence  line,  or  receiving  less  than  $10  a  week. 
In  8  of  the  13  occupational  groups  investigated,  over  half 
of  the  workers  did  not  receive  an  amount  above  the 
minimum  subsistence  wage,  while  one-third  were  below 
the  subsistence  level.6  In  Kansas  in  1919  and  1920  the 
median  wage  paid  to  women  workers  in  the  main  indus- 
tries was  $11.95,  with  20  per  cent  of  women  earning  an 
average  weekly  wage  of  less  than  $9.  It  was  found  that 
in  Ohio  in  1919,  14  per  cent  of  the  women  workers  were 

4  Third  Biennial  Keport  of  the  Industrial  Welfare  Commission, 
California,  1917-1918,  p.  9. 

•Department  of  Labor  and  Industries,  Minnesota,  Women  in  In- 
dustry, 1918,  pp.  7,  et  seq. 


Women  in  Industry  155 

receiving  less  than  $10  a  week,  and  52  per  cent  less  than 
$15  a  week.  Half  of  the  women  employed  in  the  industries 
of  Atlanta,  Georgia,  in  1920,  were  receiving  less  than 
$11.70  a  week. 

In  1919,  a  high-wage  year,  the  earnings  of  women  were 
lower  than  the  minimum  living  wage  set  in  various  parts 
of  the  country.-  An  investigation  by  the  United  States 
Bureau  of  Labor  Statistics,  covering  the  wages  of  women 
in  certain  industries  in  the  chief  industrial  states,  showed 
that  the  average  weekly  earnings  of  1,093  women  em- 
ployees in  the  glass  industry  was  $10.25 ;  of  4,297  in  the 
paper  box  industry,  $10.89 ;  of  6,439  in  overall  factories, 
$12.26;  and  of  13,374  in  the  hosiery  and  underwear  in- 
dustry, $13.04.6  The  wages  of  candy  makers  present 
similarly  unsatisfactory  conditions.  In  1919  the  actual 
earnings  of  1,246  women  piece-  and  week-workers  in 
candy  factories  in  Philadelphia  were  astonishingly  low. 
Approximately  21  per  cent  earned  less  than  $8  a  week, 
while  only  5  per  cent  earned  $20  a  week  and  over.  The 
median  wage  for  the  entire  group  was  $10.30,  although 
the  median  wage  in  individual  factories  ranged  from  $7.41 
to  $12.86.  At  the  same  time  the  minimum  living  wage 
for  that  section  of  the  country  was  placed  from  $15  to 
$18  a  week.  Meanwhile,  candy  manufacturers  were  boast- 
ing of  a  profit  of  three  hundred  per  cent.  The  bureau's 
survey  in  1920,  covering  21  leading  industries  in  32  states, 
showed  that  in  the  manufacture  of  candy,  paper  boxes, 
hosiery,  knitted  underwear,  and  overalls  less  than  a  living 
wage  was  paid,  as  measured  even  by  the  most  meager 
standard.  It  should  be  borne  in  mind  that  this  informa- 
tion is  for  a  period  when  the  demand  for  workers  was  very 
great,  and  wartime  wages  were  supposed  to  be  raising 
every  worker  to  a  standard  of  unusual  prosperity.  In 
almost  all  industries  wage  scales  declined  in  the  period 
of  depression  following  1920. 

Why  Women's  Wages  Are  Low. — In  its  final  conclu- 
gions,  the  United  States  Commission  on  Industrial  Rela- 

•  National  Consumers'  League,  "Minimum  Wage  Commissions," 
January,  h»Ul,  p.  5. 


156  Women  in  Industry 

tions  suggested  that  the  increasing  employment  of  women 
is  the  result  of  several  conditions:  The  low  wages  paid 
to  men  have  made  it  imperative  that  women  enter  indus- 
try in  order  to  help  support  the  family;  the  tendency 
on  the  part  of  employers  to  substitute  women  for  men 
because  they  will  accept  lower  wages  and  are  less  likely 
to  protest  against  undesirable  conditions;  and  the  intro- 
duction of  improved  machinery  which  makes  exceptional 
strength  and  skill  unnecessary.7  It  is  generally  recog- 
nized that  women's  wages  are  much  lower  than  men's. 
In  these  conclusions  of  the  commission  is  suggested  the 
explanation  of  the  low  wages  paid  to  women  in  industry. 
The  inferiority  of  their  remuneration  is  due  to  several 
causes : 

1.  Nature  of  the  Positions. — Positions  of  skill,  training, 
and  responsibility  are  usually  held  by  men,  whereas  posi- 
tions requiring  speed  and  a  certain  amount  of  dexterity, 
but  not  exceptional  skill,  are  usually  held  by  women.    Con- 
sequently, women  suffer  not  only  from  inadequate  com- 
pensation, but  also  from  fatigue  and  nervous  strain.    The 
conspicuous  lack  of  industrial  training  among  women  ac- 
counts for  this  discrepancy. 

2.  Inferior  Physical  Strength. — Women  are  less  skillful 
than  men  because  of  their  lack  of  opportunity  for  indus- 
trial training,  and  their  physical  endurance  is  admittedly 
less.     There  are  numerous  tasks  in  modern  industry  for 
which  women  are  physically  unfitted.    This  tends  to  over- 
crowding in  those  occupations  which  women  can  fill,  and 
a  consequent  depression  of  the  wage  scale. 

3.  Relative  Immobility. — As  a  rule,  women  are  more  set- 
tled than  men.     Employers  have  found  less  turnover  and 
a  greater  degree  of  loyalty  among  women  than  among  men. 
Women  are  manifestly  more  appreciative  of  family  ties 
and  are  more  reluctant  to  sever  their  connections  with 
home  to  seek  employment  elsewhere.    Then,  too,  there  are 
obvious  moral   dangers  involved   in  migration   from   one 
locality  to  another  which   it   is  not  wise  for  women  to 
face.     In  the  case  of  women  workers  who  have   others 

'Final  Report,  1915,  p.  72, 


Women  in  Industry  157 

depending  upon  them,  the  degree  of  mobility  is  even  less 
than  for  single  women.  The  facts  that  women  are  either 
not  inclined  to  or  cannot  move  readily  from  one  industry 
to  another  and  from  one  locality  to  another  inevitably  tends 
to  the  acceptance  of  what  would  otherwise  be  unacceptable 
terms  of  employment. 

4.  The  Comparatively  Lower  Cost  of  Subsistence. — For 
average  women  the  consumption  of  food  is  somewhat  less 
than  for  average  men,  and  they  can  extend  their  wages, 
if  necessary,  by  preparing  their  own  meals,  making  their 
own  clothing,  millinery,  et  cetera.    They  are  thus  enabled 
to  accept  lower  wages  than  otherwise,  and  many  employers 
take  advantage  of  this  fact. 

5.  Dependence  Upon  Other  Members  of  the  Family. — 
Many  women  and  girls  are  not  dependent  upon  industry 
for  a  livelihood,  but  seek  employment  a  part  or  all  of  the 
time  merely  for  the  sake  of  obtaining  spending  money.    The 
presence  of  "pin  money"  workers  has  a  depressing  effect 
upon  wage  scales  for  women.     The  competition  of  inde- 
pendent or  semi-independent  employees  with  those  who 
must  work  to  live  is  bound  to  have  an  extremely  unde- 
sirable effect. 

6.  Indifference  to  the  Acquisition  of  Adequate  Indus- 
trial Training  and  Experience. — It  is  the  experience  of 
employers  that  the  average  woman  looks  forward  to  mar- 
riage, thus  interrupting,  if  not  ending  her  industrial  career. 
As  the  British  War  Cabinet  Committee  on  Women  in  In- 
dustry observed:  "Owing  to  the  shortness  of  this  career, 
the  young  woman  has  not  the  same  encouragement  as  the 
young  man  td  cultivate  industrial  ambition,  to  work  for 
improvements  in  her  status  and  prospects,  or  to  devote 
herself  to  the  development  of  trade  union  organization." 

7.  Lack  of  Organization. — Efficient  organization  is  one 
of  the  most  urgent  industrial  needs  of  women.    For  various 
reasons,  not  difficult  to  understand,  women  have  shown 
less  capability  of  organization  than  men.    Generally  speak- 
ing, the  causes  of  lack  of  organization  arc  found  in  (a) 
women's  lack  of  interest  in  permanent  organization,   (6) 
opposition  of  employers,  and  (c)   lack  of  cooperation  on 


158  Women  in  Industry 

the  part  of  male  workers.  It  has  been  suggested  that 
women  and  girls  are  inclined  to  regard  their  work  in 
industry  as  incidental,  rather  than  as  a  main  purpose  in 
life,  that  many  of  them  are  not  dependent  upon  their  own 
efforts  for  a  livelihood,  and  that  their  industrial  careers 
are  likely  to  be  so  transitory  that  there  is  little  opportunity 
or  necessity  for  the  development  of  a  sense  of  industrial 
comradeship.  It  will  be  seen  readily  that  such  conditions 
do  not  conduce  to  interest  in  a  permanent  organization  for 
improvement  of  conditions  of  employment.  Again,  union- 
ization of  women  would  result  in  raising  wages  above  the 
prevailing  standards,  thus  depriving  the  employer  of  an 
available  supply  of  cheap  labor.  It  is  not  to  be  wondered 
at,  therefore,  that  employers  have  always  opposed  strenu- 
ously any  attempts  to  organize  women  workers.  Finally, 
organized  male  workers  have  displayed  little  disposition 
to  admit  women  to  their  unions.  While  men  have  insisted 
that  there  should  be  equal  pay  for  equal  work  regardless 
of  sex,  they  have  given  practically  no  encouragement  to 
women  to  enter  their  organizations;  rather,  indeed,  has 
there  been  opposition  to  such  a  step.  Although,  as  a  result 
of  the  war,  women  have  tended  to  crowd  into  occupations 
commonly  employing  men,  comparatively  few  of  them  have 
been  admitted  into  the  men's  unions.  Women,  however, 
are  awakening  to  the  necessity  for  organization,  and  as 
there  develops  a  larger  and  more  distinct  factory  class  of 
female  workers  permanently  connected  with  industry, 
unionization  of  women  will  be  the  rule  rather  than  the 
exception. 

8.  Greater  Cost  of  Employing  Women. — Employers  fre- 
quently claim  that  it  costs  more  to  employ  women  than 
men,  on  account  of  the  numerous  legal  restrictions  concern- 
ing the  employment  of  female  workers.    Factory  laws  re- 
quire many  appliances  for  the  protection  of  women  and 
children  employees,  which  are  not  so  rigidly  demanded  in 
the  case  of  men.     This,  according  to  employers,  makes  it 
necessary  for  them  to  secure  women  at  lower  rates  of  pay. 

9.  Lack  of  Appreciation. — It  was  pointed  out  that  the 
low  wages  of  women  workers  result  in  no  small  measure 


Women  in  Industry  159 

from  their  industrial  inertia,  which  develops  from  the 
consciousness  that  their  work  is  more  or  less  incidental 
and  temporary.  This  may  be  responsible  for  the  tendency 
on  the  part  of  women  not  to  take  their  employment 
seriously  and  to  underestimate  the  value  of  their  services 
in  industry.  For  example,  a  recent  study  of  women  in 
government  service  in  the  United  States  showed  that  of 
529  applicants  for  civil  service  examination  80  per  cent 
who  agreed  to  accept  the  advertised  minimum  salary  or 
less  were  women.8  Self-depreciation  is  undoubtedly  a  fac- 
tor in  their  wage  scales.  A  thorough  investigation  by 
the  British  War  Cabinet  Committee  on  Women  in  Indus- 
try disclosed  the  significant  fact  that  "even  the  wage- 
earning  women  in  industry  ask  and  expect  very  little 
for  themselves"  and  they  are  "less  concerned  about  their 
wages."  If  women  do  not  expect  high  wages,  it  is  un- 
likely that  they  will  get  them.  Added  to  this  self-depre- 
ciation is  the  pronounced  tendency  on  the  part  of  men 
to  underestimate  the  value  of  women's  services. 

10.  Lack  of  Demand. — Most  of  the  factors  that  have  been 
enumerated  thus  far  have  been  responsible  for  the  com- 
parative lack  of  demand  for  women,   and  explain  why 
so   many    occupations    have    been   preempted    by   men. 
Physiological   disabilities,   the  transitory   nature   of  her 
industrial  career,  the  lack  of  skill,  the  lack  of  mobility, 
the  absence  of  appreciation  of  industrial  worth,  et  cetera, 
explain    why   in   many   industries    and    professions    the 
services  of  women  have  not  been  demanded.    It  has  been 
a  case  of  the  lack  of  adaptability  of  her  labor  to  the  pre- 
vailing requirements  of  the  labor  market.    "The  number 
of  industries  that  women  may  enter  has  been  restricted 
and  in  consequence  all  women  workers  have  had  to  crowd 
into   a  comparatively  small  number   of  occupations  in 
which  there  has  resulted  an  oversupply  of  female  labor 
with  a  consequent  detrimental  effect  on  remuneration."* 

11.  Tradition. — Custom  and  tradition  have  dictated  that 

*  Monthly  Labor  Review,  January,  1920,  pp.  208-217. 
'Report    of   the    British    War   Cabinet    Committee   on    Women    in 
Industry,  1919,  p.  72. 


160  Women  in  Industry 

"woman's  place  is  in  the  home,"  and  have  prevented  the 
preparation  of  women  for  the  more  responsible  occupa- 
tional and  professional  positions.  To  give  the  son  a  trade 
has  long  been  accepted  as  the  proper  procedure;  the 
daughter  has  not  always  been  so  carefully  guided  in 
preparation  for  a  career. 

12.  Political  Weakness. — Evidence  is  not  lacking  that 
the  absence  of  voting  power  has  been  responsible  for 
discrimination  against  women  in  public  employment,  and 
for  the  same  reason  they  have  been  unable  to  take  their 
fight  for  improved  conditions  of  employment  to  parlia- 
mentary bodies.  For  example,  in  the  government  service 
of  the  United  States  discriminations  prevailed  in  civil 
service  examinations  up  to  November,  1919,  which  barred 
women  from  a  large  proportion  of  the  higher  grades  of 
service,  a  policy  still  reflected  in  the  positions  to  which 
women  are  appointed  and  in  the  relative  salary  levels.10 
Equality  of  treatment  evidently  does  not  obtain  even  in 
government  service.  With  the  present  tendency  towards 
universal  suffrage  this  discrimination  will  doubtless 
diminish. 

The  foregoing  conditions  have  retarded  greatly  the  in- 
dustrial progress  of  women.  Low  wages  and  the  condi- 
tions that  produce  them  have  tended  to  react  in  a  vicious 
circle.  Low  wage  scales  have  accentuated  physical  dis- 
abilities and  have  been  both  the  cause  and  the  effect  of 
comparatively  inefficient  and  inconstant  work,  inadequate 
training,  and  the  lack  of  industrial  organization.  More- 
over, women's  wages  in  certain  industries  have  been  de- 
pressed to  a  level  unwarranted  by  economic  competition 
because  unscrupulous  and  unthinking  employers,  recog- 
nizing the  fundamental  weakness  in  women's  bargaining 
power,  have  paid  wages  not  only  less  than  their  services 
were  worth  but  even  insufficient  to  maintain  a  standard 
of  comfort  and  decency.  But  the  future  contains  greater 
promise.  "Women's  industrial  consciousness  has  been 
quickened;  they  are  realizing,  slowly  it  is  true,  but  with 
deep  conviction,  their  potentialities  and  their  power ;  thejr 

10  Monthly  Labor  Eeview,  January,  1920,  pp.  208-217. 


Women  in  Industry  161 

are  organizing  to  an  extent  undreamed  of  before,  and 
they  have  the  opportunity,  little  used  at  present  but  lying 
to  their  hands,  of  using  their  large  numbers  and  their 
great  powers  for  extending  the  outlook  and  improving 
the  circumstances  both  of  their  sex  and  of  the  race."11 
The  conclusion  is  inescapable  that  the  time  will  soon  come 
when  women  will  demand  a  wage  corresponding  to  their 
abilities,  efforts,  and  necessities. 

Equal  Pay  for  Equal  Work. — Women  usually  receive 
less  wages  than  men  even  when  the  tasks  performed  and 
the  output  are  the  same.  Dr.  Royal  Meeker,  while  United 
States  Commissioner  of  Labor  Statistics,  pointed  out  that 
women  often  outdo  men  in  quantity  and  quality  of  output, 
while  their  wages  remain  lower  than  the  wages  paid  to 
men.  Employers  defend  this  principle  on  the  ground  that 
the  work  done  by  women  is  not  the  same  as  that  done 
by  men,  although  in  many  instances  it  has  been  impossible 
to  detect  these  alleged  differences.  A  recent  report  from 
the  state  of  Nebraska  may  be  taken  as  typical  of  the 
prevailing  situation.  It  was  found  that  men  were  receiv- 
ing 66  per  cent  higher  wages  than  women,  although  the 
work  performed  was  often  identical.  The  average  yearly 
wage  for  men  was  $793.66,  while  for  women  it  was  $560.56. 
The  statement  of  the  Department  of  Labor  suggests  the 
injustice  of  the  discrimination.  "The  discrepancy  be- 
tween the  amount  of  wages  paid  men  and  women  for  the 
same  work  is  more  a  matter  of  tradition  than  common 
sense.  The  real  basis  of  compensation  should  be  the  value 
of  services  rendered  rather  than  who  rendered  the 
service. "  "  In  New  York  it  was  found  that  in  no  case 
did  a  woman  producing  more  than  a  man  receive  as 
much  as  a  man  doing  the  same  work  in  the  same  plant. 
All  of  the  women  received  less  than  the  wage  paid  to 
men  workers  who  were  not  so  desirable,  most  of  them 
receiving  75  per  cent  and  many  of  them  50  per  cent  of 
men's  wages.  Moreover,  it  was  discovered  that  women 

11  Ministry   of  Reconstruction    (British)    Report   of   tho    Women's 
Employment  Committee,  p.  40. 
"Department  of  Labor,  Sixteenth  Biennial  Report,  1917-1918,  p.  81. 


162  Women  in  Industry 

producing  less  than  men  were  penalized  in  earnings  to 
no  greater  extent  than  women  producing  more  than  men. 
"It  makes  little  difference  whether  a  woman  produces 
more  or  less  than  a  man.  The  wage  rate  received  does 
not  vary  with  her  production.  ...  In  a  foundry  where 
women  are  used  as  inspectors  they  handle  twice  as  many 
pieces  as  men,  but  receive  $4.59  a  week  less."  13 

In  recent  years  there  has  been  much  agitation  for 
"equal  pay  for  equal  work  without  discrimination  as  to 
sex."  Governmental  agencies  in  England  and  the  United 
States  during  the  war  adopted  the  principle  of  equal  pay 
for  equal  work  where  women  filled  positions  formerly 
occupied  by  men.  Such  a  guaranty  was  necessary  in 
order  to  prevent  the  employment  of  women  as  a  subter- 
fuge to  obtain  cheap  and  exploitable  labor,  thus  affording 
the  unscrupulous  employer  an  unfair  advantage  over  his 
more  honest  and  generous  competitors.  Organized  male 
workers  have  recently  demanded  the  application  of  the 
same  principle.  There  has  been  considerable  discussion 
regarding  the  meaning  of  the  slogan  "equal  pay  for  equal 
work,"  and  until  some  definite  interpretation  is  agreed 
upon  the  application  of  the  principle  will  be  difficult.  To 
some  people  it  means  an  occupational  rate,  or  equality  of 
pay  on  the  time  basis,  while  to  others  it  is  essentially 
equal  compensation  in  the  sense  that  pay  should  be  in 
proportion  to  efficient  output.  There  are  many  reasons 
why  the  time  basis  would  prove  unsatisfactory  because 
of  the  fundamental  differences  between  men  and  women 
workers.  The  employer  would  find  it  difficult  to  employ 
women  rather  than  men  if  such  a  basis  of  compensation 
were  adopted,  and  as  a  consequence  many  women  would 
be  unable  to  find  work.  It  is  generally  recognized  that 
the  employment  of  women  imposes  expense  burdens  upon 
the  employer  which  are  not  incident  to  the  same  degree 
in  the  employment  of  men.  The  legal  requirements  of 
rest  rooms,  lavatories,  seats,  and  other  accommodations 
do  not  generally  obtain  in  the  employment  of  men.  Lost 

11  New  York  Industrial  Commission,  The  Industrial  Replacement 
of  Men  by  Women,  1919,  pp.  28-30. 


Women  in  Industry  163 

time  through  illness  and  domestic  causes  is  proportionately 
greater  among  women  than  men,  and  industrial  experience 
seems  to  indicate  that  the  cost  of  supervision  is  greater 
in  the  case  of  women.  Then,  too,  there  are  legal  restric- 
tions such  as  the  prohibition  of  night  work  for  women 
and  the  limitation  of  the  working-day  which  are  not  so 
generally  applicable  to  male  workers.  Lack  of  physical 
strength  and  industrial  training  may  tend  to  make  a 
difference  in  the  productivity  of  men  and  women  which 
would  not  be  recognized  on  the  time  basis. 

On  the  other  hand  there  are  certain  objections  raised 
against  the  application  of  the  principle  of  equal  pay  in 
proportion  to  output.  The  opponents  of  this  principle 
claim  that  it  gives  employers  a  dangerous  power  of  con- 
trol over  wages,  since  (1)  collective  bargaining  would 
be  abolished  and  (2)  women  would  have  no  standard 
rates,  various  employers  evaluating  their  output  differ- 
ently. It  may  be  pointed  out  further  that  men,  both 
under  union  and  nonunion  conditions,  are  more  frequently 
paid  the  same  rate  for  the  same  occupation  regardless 
of  individual  differences  in  efficiency  and  output.  It  can- 
not be  gainsaid,  however,  that,  for  reasons  suggested  in 
the  preceding  paragraph,  the  differences  in  productivity 
between  men  and  women  employees  in  the  same  occupa- 
tion are  much  greater  than  the  differences  between  men. 
Whatever  method  of  measurement  may  be  accepted,  jus- 
tice demands  that  whenever  women  perform  the  same  tasks 
with  equal  efficiency  as  men  the  principle  of  equal  com- 
pensation should  be  applied. 

The  Efficiency  of  Women  Workers. — The  idea  has  pre- 
vailed that  women  workers  are  neither  actually  nor 
potentially  so  efficient  as  men  in  operations  requiring  a 
high  degree  of  technical  skill,  but  this  contention  has 
rarely  been  supported  by  specific  evidence.  Only  in  recent 
years  has  there  been  a  general  attempt  to  gather  sta- 
tistical evidence  of  the  relative  efficiency  of  the  two  sexes, 
and  even  now  the  conclusions  are  so  conflicting  that  dog- 
matic assertions  are  unwarranted.  It  is  necessary  to 
Keep  in  mind  the  fact  that  there  are  obvious  difficulties 


164  Women  in  Industry 

in  measuring  the  relative  productivity  of  men  and  women. 
In  industry  there  are  trades  and  occupations  which  are 
distinctly  the  province  of  women,  and  others  which  are 
exclusively  men's,  while  in  many  lines  of  endeavor  both 
male  and  female  labor  can  be  employed  more  or  less 
interchangeably.  But  even  where  women  and  men  are 
engaged  in  the  same  industry  there  are  processes  per- 
formed only  by  women  and  others  by  men  only.  Many 
studies  of  the  efficiency  of  industrial  women  were  made 
during  the  period  of  the  World  War,  so  there  may  be 
some  question  of  the  applicability  of  conclusions  to 
normal  conditions  of  production,  when  the  incentives  to 
speed  and  efficiency  are  less  urgent.  Yet,  there  is  every 
reason  to  believe  that  under  normal  conditions  and  with 
equal  preparation  their  productivity  will  compare  favor- 
ably with  ttiat  of  men  workers. 

Recent  industrial  experiences  of  France,  Great  Britain, 
and  the  United  States  indicate  that  there  are  many  indus- 
trial occupations  in  which  women  display  greater  effi- 
ciency than  men,  while  in  others  their  productivity  is  far 
less.  According  to  British  experience,  women  appeared 
to  excel  in  delicate  and  refined  manipulation,  and  to 
tolerate  better  than  men  the  monotony  of  repetitious 
tasks.  In  some  trades  women  showed  a  tendency  to  care- 
lessness, inaccuracy,  and  haste,  and  they  did  not  take 
so  good  care  of  their  machines  as  men,  but  these  defi- 
ciencies were  attributed  more  to  the  lack  of  industrial 
training  and  experience  than  to  any  natural  inferiority. 
In  trades  such  as  cotton  weaving,  in  which  women  have 
had  years  of  experience,  waste  and  carelessness  were 
found  to  be  infinitesimal.  On  long  night  shifts  women 
showed  a  tendency  to  tire  sooner  than  men,  and  in  un- 
skilled occupations  where  a  task  was  beyond  the  limits 
of  their  physical  strength  they  were  at  a  marked  disad- 
vantage.14 France  found  that  women  fell  short  in  produc- 
tion, but  were  more  attentive  and  often  more  skillful  and 
zealous  than  men  workers.  On  the  other  hand,  women 
were  more  subject  to  fatigue,  less  regular  in  attendance, 

"British  War  Cabinet  Committee,  op.  cit.,  p.  104. 


Women  in  Industry  165 

and  less  capable  of  handling  heavy  tasks.  In  operating 
instruments  of  precision,  electric  machines,  electric  cranes, 
and  mechanism  requiring  close  attention  and  care,  women 
excelled.  Modification  of  apparatus,  so  as  to  limit  the 
physical  effort  required,  is  necessary  to  increase  the  pro- 
ductivity of  women  in  certain  industries.15 

In  the  United  States  women  who  have  entered  occupa- 
tions preempted  by  men  have  often  proved  themselves 
equally  efficient,  in  some  instances  showing  even  greater 
skill.  In  thirty  out  of  about  one  hundred  metal  trades 
establishments,  it  was  found  that  women's  output  ex- 
ceeded men's  in  all  operations;  in  fifteen  their  output  was 
less;  while  in  the  remainder  it  was  equal  or  greater  in 
some  operations  and  less  in  others.18  An  investigation 
of  533  concerns  that  had  substituted  women  for  men 
workers  in  the  manufacture  of  metals,  chemicals,  rubber, 
woodwork,  textiles,  leather,  electrical  appliances,  glass, 
airplanes,  seaplanes,  ships,  and  musical  instruments 
showed  that  in  77.4  per  cent  of  the  firms  women's  work 
was  as  satisfactory  or  better  than  men's,  while  22.6  per 
cent  stated  that  the  work  of  women  employees  was  not 
so  satisfactory.  Women  were  particularly  successful  in 
their  new  occupations  in  the  rubber,  electrical,  leather, 
and  metal-working  trades.  The  conclusions  of  the  em- 
ployers were  to  the  effect  that  women  were  unprepared 
for  skilled  work,  and  that  in  order  to  make  a  successful 
substitution  of  women  for  men  it  was  essential  to  provide 
definite  training;  that  women  possessed  inferior  physical 
strength  and  could  not,  therefore,  be  employed  on  certain 
jobs;  that  when  the  work  was  very  rough  and  dirty,  as 
in  lumbering  and  saw-mill  work,  women  did  not  succeed 
so  well ;  and  that  when  an  efficient  woman  was  found  she 
made  an  exceptionally  fine  crane  operator,  being  a  better 
judge  of  distance,  quicker,  and  more  careful  of  the  lives 
of  fellow  employees." 

"Monthly  Labor  Review,  August,  1920,  pp.  102,  et  teq. 
"Monthly  Labor  Review,  October,   1918,  p.   192. 
"See,  The  New  Position  of  Women  in  American  Industry,  United 
States  Women's  Bureau,  Bulletin  No.  12,  1920. 


166  Women  in  Industry 

Concerning  the  industrial  efficiency  of  women,  then, 
several  conclusions  may  be  drawn.  (1)  On  account  of 
physiological  conditions,  women  tend  to  be  less  regular 
in  employment  than  men,  and  this  fact  probably  will 
make  them  permanently  less  productive  than  men.  (2) 
There  are  tasks  requiring  a  great  amount  of  physical 
strength  which  women  cannot  perform.  (3)  In  occu- 
pations requiring  close  attention  and  delicate  handling 
women  are  more  efficient  than  men.  (4)  The  chief  rea- 
sons why  women  have  been  less  efficient  than  men  in  the 
same  trade  and  at  the  same  tasks  is  their  lack  of  indus- 
trial training  and  experience.  When  equally  trained  and 
experienced,  women  are  generally  as  efficient  as  men  in 
positions  not  beyond  the  limits  of  their  physical  powers. 

Women's  Industrial  Training. — Women's  industrial 
training  has  been  limited  and  of  poor  quality,  being  noth- 
ing but  a  disguise  for  the  employment  of  cheap  labor. 
The  reasons  for  this  are  found  in  the  prejudice  of  the 
employer  and  male  employees,  and  the  traditional  aver- 
sion of  society  to  industrial  training  for  women.  Tech- 
nical dexterity  can  be  attained  by  women  to  a  degree 
not  inferior  to  that  of  men ;  what  is  really  lacking  is  the 
opportunity  to  acquire  such  skill.  The  general  industrial 
capacity  and,  consequently,  the  compensation  of  women 
will  rise  proportionately  as  the  girl  is  given  an  equal 
opportunity  with  the  boy  to  prepare  for  industry,  com- 
merce, and  business.  For  example,  in  Fort  Worth,  Texas, 
in  an  investigation  covering  about  one-half  of  the  women 
wage-earners  in  the  principal  industrial,  commercial,  and 
mercantile  establishments,  the  majority  of  whom  were 
over  21  years  of  age,  94.8  per  cent  of  the  women  and  girl 
wage-earners  in  commerce  and  industry  had  not  com- 
pleted the  high  school  course,  and  49.8  per  cent  had  not 
gone  beyond  the  eighth  grade.  The  average  wage  scale 
increased  according  to  the  amount  of  education,  the  most 
striking  increase  in  wages  shown,  $3.41  a  week,  being 
among  those  who  had  some  college  education.  This  was 
an  increase  of  17.6  per  cent  over  the  average  wage  scale 
of  those  who  left  school  after  finishing  the  high  school 


Women  in  Industry  167 

course.  The  increase  in  salary  of  those  who  had  com- 
pleted the  high  school  course  over  those  who  had  com- 
pleted the  third  grade  was  found  to  be  $11.13,  or  practi- 
cally 100  per  cent,  while  those  who  had  received  some 
college  education  were  receiving  $12.47,  or  110.8  per  cent 
a  week  more  than  the  third  graders.18  In  the  garment 
trades  there  was  little  connection  between  education  and 
wages,  but  the  general  results  of  the  survey  showed  that 
the  values  of  education  for  women  workers  comprise  in- 
creased earnings,  a  higher  standard  of  efficiency,  and 
greater  social  and  economic  usefulness.  The  potential 
industrial  capacity  of  woman  is  receiving  greater  recog- 
nition, and  more  adequate  provision  is  being  made  for 
her  professional,  industrial,  and  commercial  training. 
Old  prejudices  are  vanishing  rapidly  because  woman's 
aptitude  for  industrial  training  has  been  proved  in  the 
most  advanced  industrial  nations. 

The  Problem  of  Hours. — At  a  very  early  date  in  Eng- 
land and  in  the  United  States  excessive  hours  of  labor 
for  women  constituted  a  serious  problem,  and  public  in- 
terest was  aroused  to  a  marked  extent.  Recognition  of  this 
problem  has  usually  been  the  result  of  an  established  rela- 
tion between  hours  of  work  and  health,  particularly  as  these 
affect  the  future  of  the  race.  Little  cognizance  was  taken 
of  the  industrial  position  of  woman  and  her  right  to  fair 
treatment  as  a  human  factor  in  production.  At  the  present 
time,  however,  there  is  a  distinct  tendency  to  approach  the 
problem  also  from  the  standpoint  of  the  requirements  of 
leisure,  cultural  opportunity,  and  social  development, 
which  are  rightfully  claimed  by  women  in  a  progressive 
community.  The  problem  of  hours  for  women  workers 
is  not  one  concerning  merely  the  length  of  the  basic  work- 
day, but  the  relation  of  the  time  spent  in  industry  to 
every  phase  of  woman's  life,  and  this  includes  the  ques- 
tion of  fatigue  and  efficiency  as  well  as  the  things  already 
mentioned.  "Long  hours  in  the  factory  are  not  as  serious 
for  the  man,  who  is  through  work  when  he  leaves  his  job 

"Mimeographed  report  issued  by  the  woman'*  division  of  the 
Texas  Bureau  of  Labor  Statistics. 


168  Women  in  Industry 

at  night,  as  they  are  for  the  woman  who  often  has  several 
hours  of  housework  to  do  after  she  gets  home."  It  would 
avail  little  from  the  standpoint  of  the  worker  or  society 
to  have  an  adequate  wage  scale  for  women,  if  protracted 
and  excessive  hours  of  employment  were  to  continue. 
The  British  reconstruction  committee  investigating 
women  in  industry  concluded  that  unless  increased  pur- 
chasing power  in  such  material  things  as  food  and  cloth- 
ing is  correlated  with  an  amount  of  leisure  giving  oppor- 
tunity for  improved  education,  wholesome  recreation, 
family  life,  time  for  study,  and  exercise  of  the  duties 
of  citizenship,  the  reconsideration  of  women's  industrial 
position  will  not  have  advanced  far. 

The  ideal  of  the  8-hour  day  and  the  48-hour  week 
for  women  workers  has  not  yet  been  generally  at- 
tained in  the  United  States  or  in  other  countries.  Of 
12,300  women  employed  in  110  establishments  investi- 
gated recently  (1918)  in  Indiana,  30  per  cent  had  a 
working-day  of  10  hours  or  over,  not  including  overtime. 
Reports  of  overtime  were  made  for  53  establishments  em- 
ploying 8,331  women  and  of  these,  13  had  a  working  week 
of  65  hours  or  more.  Specific  instances  of  overtime  legally 
possible  in  that  state  showed  women  working  as  long  as  65 
hours  a  week  in  a  clothing  factory,  73  hours  in  one  can- 
nery and  84  in  another,  75  hours  in  a  7-day  week 
in  a  shop  manufacturing  caskets,  and  88  hours  and  40 
minutes  in  an  establishment  manufacturing  automobile 
parts.19  In  168  restaurants  investigated  by  the  Minne- 
sota State  Department  of  Labor  during  1919-1920,  it  was 
found  that  most  of  the  women  worked  more  than  58  hours 
a  week.  Ninety-five  of  these  workers  were  on  duty  from 
80  to  85  hours  a  week,  and  a  few  worked  more  than  100 
hours.  It  was  a  common  thing  for  women  to  be  on 
duty  from  10  to  12  hours  a  day,  and  in  not  a  few  cases 
15  to  16  hours  a  day.20  An  industrial  survey  in  Virginia 

M  U.  S.  Women  in  Industry  Service,  Beport  on  Labor  Laws  for 
Women  in  Indiana,  1918.  Bulletin  No.  2. 

"Seventh  Biennial  Report  of  the  Department  of  Labor  and  In- 
dustries. 


Women  in  Industry  169 

in  the  latter  part  of  1919  showed  that  of  18,781  women 
employees  in  146  establishments,  over  46  per  cent  were 
working  10  hours  or  more  a  day,  and  over  40  per  cent 
were  working  more  than  54  hours  a  week.  More  than 
3  per  cent  worked  at  night.21  Examples  of  women  work- 
ing excessive  hours,  often  in  defiance  of  law,  could  be 
multiplied  almost  indefinitely.  While  the  legal  8-hour 
day  has  been  introduced  in  several  states,  the  9-hour 
and  the  10-hour  day  with  a  54-  to  60-hour  week  generally 
prevail  in  the  United  States. 

Excessive  hours  of  labor,  night  work,  and  overtime  are 
peculiarly  injurious  to  women  workers.  Numerous  studies 
in  Great  Britain  and  the  United  States  have  discovered 
a  definite  relation  between  hours  of  work,  night  work, 
and  overtime  on  the  one  hand,  and  industrial  efficiency 
and  output  and  health  on  the  other.  Fatigue,  it  will  be 
remembered,  "is  the  sum  of  the  results  of  activity  whicK 
show  themselves  in  a  diminished  capacity  for  doing 
work,"  and  is  measured  by  decreased  output.  Perma- 
nent physical  and  mental  injury  may  result  from  fatigue, 
thus  affecting  adversely  the  worker's  future  industrial 
career.  Proper  adaptation  of  the  job  to  the  worker  is  the 
method  of  escape,  and  this  means  proper  adjustment  of 
hours,  physical  conditions  of  employment,  and  the  re- 
quirements upon  the  physical  and  mental  powers  of  the 
employee.  Long  hours  increase  fatigue  and  diminish  out- 
put. This  fact  has  been  demonstrated  by  numerous  ex- 
periments in  this  and  other  countries.  Evidence  from  the 
Illinois  Industrial  Survey  of  1918  presents  findings  similar 
to  those  of  the  British  Munitions  Workers'  Committee,  and 
of  Miss  Josephine  Goldmark  in  her  "Fatigue  and  Effi- 
ciency." The  Illinois  commission  submitted  a  study  of 
three  firms  in  the  garment,  soap,  and  corset  industries 
respectively,  where  a  reduction  of  hours  had  been  made 
without  changing  any  other  conditions  affecting  produc- 
tion. The  results  of  the  experiments  are  included  in  the 
following  table: 

"  Monthly  Labor  Review,  Auguat,  1920,  pp.  99,  100. 


170 


Women  in  Industry 


Length  of 
Period 
Studied 

Decrease  in 
Hours  of 
Work 

Increase  in 
Total  Output 
Per  Cent 

Increase  in 
Hourly 
Output 
Per  Cent 

Shop  A 
"    B 
"    C 

4  years 
9  months 
1J  years 

54  to  48 
65  to  48 
54  to  48 

About  2. 
3.97 
13.4 

7. 
11.8 
31.5 

In  shops  B  and  C  the  same  group  of  workers  was 
studied  before  and  after  the  change  in  hours.  In  shop  A 
the  entire  force  of  buttonhole  makers  was  studied.  Under 
the  54-hour  week  the  production  of  two  groups  of  ex- 
perienced workers  was  1,395  buttonholes,  while  under  the 
48-hour  week  it  was  1,428.  In  factory  B  in  which  the 
work  consisted  of  wrapping  and  packing  soap,  the  aver- 
age number  of  cases  wrapped  and  packed  per  day  under 
the  55-hour  week  was  42.8,  while  under  the  48-hour  week 
the  average  was  45.5.  In  factory  C,  in  which  corsets  were 
made,  the  weekly  output,  as  determined  by  the  wages 
paid,  increased  13.4  per  cent  and  the  hourly  output  31.6 
per  cent.  This  increase  in  production  was  maintained 
for  over  a  year.  The  testimony  of  the  British  Munition 
Workers'  Committee  was  that  "speaking  generally,  the 
.  .  .  data  show  that  a  reduction  in  weekly  hours  of  actual 
work  varying  from  7  to  20  hours  per  week,  in  no  case 
resulted  in  more  than  an  insignificant  reduction  of  total 
output,  while  on  the  average  it  produced  a  substantial 
increase."  In  order  to  secure  maximum  economic  return 
to  both  employers  and  employees  there  must  be  not  only 
freedom  from  illness  which  reduces  the  workers'  efficiency, 
but  there  must  be  no  undue  amount  of  fatigue  resulting 
from  the  day's  labor,  for  fatigue  weakens  resistance  to 
more  serious  ills,  lessens  accuracy  and  speed,  diminishes 
output,  and  increases  accidents.  For  the  social  and 
economic  well-being  of  the  workers,  hours  of  labor  must 
not  be  too  long  to  preclude  recovery  from  fatigue  by  rest 
from  work  and  by  sleep.22  No  truth  has  been  demon- 

M  Illinois  Industrial  Survey,  Hours  and  Health  of  Women  Workers, 
1919,  pp.  8,  9. 


Women  in  Industry  171 

strated  more  ably  than  the  one  that  excessive  hours  of 
labor  are  socially  and  economically  unsound. 

Labor  Turnover  and  Unemployment  Among  Women. — 
Statistical  evidence  of  labor  turnover — the  shift  in  per- 
sonnel— is  very  meager,  but  such  as  is  available  seems 
to  indicate  that  women  are  more  stable  than  men.  Em- 
ployers who  have  observed  closely  the  relative  infrequency 
of  turnover  among  women  have  concluded  that  this  ad- 
vantage is  counterbalanced  somewhat  by  the  fact  that 
the  stay  of  so  many  women  in  industry  is  comparatively 
short.  The  fact  that  women  do  not  change  jobs  on  the 
least  provocation  may  be  accounted  for  by  their  lack  of 
industrial  training  which  limits  types  of  jobs  they  are 
able  to  fill,  and  by  their  comparatively  weak  organization 
and  their  inexperience  in  locating  new  work.  There  is,  more- 
over, a  moral  limitation  on  the  freedom  of  women  to  move 
from  one  locality  to  another.  It  should  not  be  understood 
that  women  remain  on  the  job  in  spite  of  intolerable 
conditions.  An  investigation  of  4,711  women  workers  in 
representative  industries  of  Illinois,  in  1918,  showed  that 
the  proportion  of  workers  remaining  in  a  given  position 
a  year  or  over  decreased  directly  as  hours  increased,  and 
the  number  who  had  spent  under  six  months  at  their 
work  increased  with  the  increase  in  hours.  This  fact  is 
significant  because  every  change  in  the  working  force 
means  a  financial  loss  to  the  employer.  Labor  turnover 
increases  with  the  growth  of  dissatisfaction  in  the  plant, 
and  dissatisfaction  grows  out  of  undesirable  wages,  hours, 
and  conditions  of  employment.  The  Illinois  survey 
showed  that  there  is  a  definite  relation  between  hours  of 
work  and  the  attitude  of  the  worker  toward  her  work. 
Of  those  working  under  43  hours  a  week  less  than  one- 
fifth  had  complaints  to  make  concerning  their  conditions, 
while  over  one-half  of  those  working  61  hours  and  over 
registered  many  complaints."  Accumulation  of  such 
grievances  increases  materially  the  number  of  workers 
who  leave  the  service  of  the  company. 
Nothing  dampens  the  hopes  and  aspirations  of  modern 
"  The  Illinois  Industrial  Survey,  op.  cit.,  pp.  61-64. 


172  Women  in  Industry 

women  wage-earners  more  than  does  the  constant  fear 
of  economic  insecurity  which  results  from  periodic  unem- 
ployment. Great  as  is  the  evil  of  low  wages,  it  is  not 
so  depressing  as  the  failure  to  find  and  to  hold  employ- 
ment, for  to  every  worker  half  a  loaf  is  better  than  none. 
The  greatest  deficiency  of  modern  industrialism  is  its 
failure  to  provide  steady  employment  for  the  great  mass 
of  industrial  workers.  From  the  standpoint  of  regularity 
of  employment  wage-earning  women  are  particularly  un- 
fortunate in  their  occupations,  and  the  effects  of  unem- 
ployment upon  them  are  likely  to  be  very  serious.  The 
seasonal  trades,  such  as  sewing,  garment  making,  canning, 
millinery,  artificial  flower  making,  feather  making,  paper 
box  making,  and  the  confectionery  industry  employ  large 
numbers  of  women.  Estimates  for  Paris  show  that  only 
one-fourth  of  the  artificial  flower  makers  are  employed 
all  the  year,  and  65  per  cent  do  not  work  at  all  from 
one  to  seven  months  of  the  year.  In  New  York  a  typical 
artificial  flower  shop  employing  5,000  workers  in  a  period 
of  business  activity  reduces  its  force  to  1,000  during  the 
dull  season.  Twenty-five  employers  in  the  paper  box 
industry  in  Philadelphia  stated  that  one-fourth  of  their 
entire  force  of  girls  is  dismissed  after  Christmas.2*  In  the 
candy  making  industry,  which  is  highly  seasonal,  60  out 
of  every  100  employees  are  women.  The  earnings  of  these 
workers,  like  those  of  all  seasonal  trades,  are  very  low 
partly  because  of  the  loss  of  time  caused  by  seasonal 
fluctuations  in  production. 

An  investigation  by  the  United  States  Bureau  of  Labor 
Statistics  disclosed  the  fact  that  unemployment,  on  ac- 
count of  its  chronic  recurrence,  has  particularly  serious 
consequences  in  the  women 's  garment  industries.  In  these 
trades  the  workers  find  their  means  of  livelihood  inter- 
rupted periodically  through  no  fault  of  their  own.  In 
the  dress  and  waist  industry  and  the  cloak,  suit,  and  skirt 
industry  of  New  York  City,  only  one-half  of  the  number 
of  workers  employed  during  the  busiest  seasons  of  the 
year  were  found  employed  in  the  respective  industries 

••See  Frances  A.  Kellor,  Out  of  Work,  Chap.  II. 


Women  in  Industry  173 

during  the  dull  seasons.  The  amount  of  employment  in 
the  cloak,  suit,  and  skirt  industry  of  New  York  during 
one  of  the  dullest  weeks  of  the  year  was  only  43  per  cent 
of  the  average  week,  and  slightly  over  one-fourth  of  the 
busiest  week  in  the  year.  In  the  cloak  and  suit  industry 
of  Chicago,  the  pay-rolls  during  the  dullest  week  were 
less  than  one-half  those  of  the  average  week  and  only, 
one-third  of  the  amount  paid  out  during  the  busy  season. 
Similar  fluctuations  were  found  in  other  branches  of  the 
women's  garment  industry.  The  chief  cause  of  these 
fluctuations  is  said  to  lie  in  the  whim  of  the  ultimate 
consumer  and  the  fickleness  of  style.  "In  spite  of  tre- 
mendous advances  made  in  late  years  in  the  women's 
garment  industries  in  matters  relating  to  conditions  of 
work,  elimination  of  excessive  overtime,  shortening  of  the 
regular  hours  of  labor,  and  raising  rates  of  weekly  earn- 
ings, the  matter  of  unemployment  at  the  present  time 
seems  to  be  more  acute  than  ever.  Somehow  or  other', 
in  spite  of  all  the  advances  made  and  reforms  introduced, 
the  cardinal  problem — the  matter  of  more  steady  em- 
ployment— still  remains  unsolved."2* 

The  ill  effects  of  uncertain  and  irregular  employment 
upon  women  can  scarcely  be  measured.  Periods  of  fever- 
ish overwork  alternating  with  underemployment  or  unem- 
ployment have  far  more  serious  consequences  for  women 
than  for  men.  Under  such  conditions  the  health  of  women 
workers  is  undermined  quickly,  and  with  their  sources 
of  income  partially  or  completely  shut  off  the  danger 
of  moral  degeneration  is  very  real.  The  effects  of  these 
conditions  upon  the  future  well-being  of  the  nation  are  not 
difficult  to  determine. 

Married  Women  in  Industry. — According  to  data 
gathered  by  the  United  States  Census  Bureau,  the  number 
of  gainfully  employed  married  women  was  769,477  in 
1900,  and  1,890,626  in  1910,  an  increase  of  123  per  cent 
for  the  decade.  One-tenth  of  all  the  married  women  in 
the  United  States  were  said  to  be  at  work  outside  the 
home  in  1910,  thus  constituting  about  one-fourth  of  all 

*U.  8.  Bureau  of  Labor  Statistics,  Bulletin  183,  1915,  pp.  7-9. 


174  Women  in  Industry 

adult  working  women  in  the  country.  The  rising  cost 
of  living  caused  further  increases  in  the  years  following 
1915,  while  the  depression  that  followed  in  the  wake  of 
the  World  War  forced  many  married  women  to  aid  in 
the  support  of  the  family.  A  study  of  women  wage- 
earners  in  Minnesota  in  1919,  showed  that  of  10,090  women 
who  were  or  had  been  married  34.7  per  cent  were  mothers, 
nearly  one-half  of  them  having  two  or  more  children. 
Foreign-born  women  more  often  had  children  and  were 
more  frequently  found  in  the  lower-paid  wage  groups. 
Of  the  51,361  female  workers  included  in  the  survey, 
one-fifth  were  married.  A  survey  of  women  workers  in 
Fort  Worth,  Texas,  late  in  1920,  showed  that  of  3,353 
women  gainfully  employed  27.7  per  cent  were  married, 
while  8.3  per  cent  were  widowed.  Married  women  con- 
stituted 47.5  per  cent  of  all  the  women  employees  in  hotels 
and  restaurants.  In  the  same  year  a  study  of  women 
workers  in  Milwaukee,  Wisconsin,  showed  that  of  1,187 
for  whom  marital  status  was  ascertained,  fully  86  per 
cent  were  married. 

Although  statistical  evidence  is  not  available,  it  is  likely 
that  at  the  present  time  2,500,000,  or  about  one-fourth  of 
the  gainfully  employed  women  workers  in  the  United 
States,  are  either  married  or  widowed.  In  England  and 
Wales  in  1911,  over  14  per  cent  of  the  total  of  occupied 
women  were  married  and  8.5  per  cent  were  widowed. 
Out  of  a  total  of  1,900,000  in  the  main  industries  in  which 
women  were  employed  in  that  year,  fully  300,000  were 
married  and  nearly  100,000  were  widowed.  The  increase 
in  married  women  in  industry  during  the  war  was 
said  to  be  excessive.  Census  figures  underestimate 
the  number  of  married  women  gainfully  employed  be- 
cause many  women  employed  intermittently  do  not  enter 
themselves  as  wage-earners,  and  even  when  they  enter 
industry  more  or  less  permanently  they  conceal  their  con- 
jugal relation,  fearing  that  such  a  fact  will  militate  to 
their  disadvantage.  Large  numbers  of  married  women 
work  in  seasonal  industries,  such  as  agriculture  and  can- 
ning, and  form  a  considerable  portion  of  the  industrial 


Women  in  Industry  175 

homeworkers,  yet  do  not  give  their  status  as  that  of 
wage-earners. 

Married  women  who  enter  industry  may  be  classified 
into  three  groups,  depending  upon  the  conditions  that 
account  for  their  employment:  (1)  those  who  must  seek 
employment  outside  the  home  because  they  are  the  chief 
support  of  their  families;  (2)  those  who  enter  industry 
from  preference,  not  impelled  by  the  pressure  of  economic 
circumstances;  and  (3)  those  who  are  intermediate  be- 
tween these  two  groups,  whose  employment  is  more  or 
less  irregular  and  whose  entrance  into  industry  is  deter- 
mined by  the  variable  factors  of  economic  conditions  in 
a  given  trade,  locality  or  in  the  country  as  a  whole.  The 
first  group  includes  the  wives  of  men  who,  on  account  of 
physical,  mental,  or  moral  incapacity,  cannot  earn  wages. 
In  this  group  may  be  included  also  widows  and  unmarried 
mothers  with  dependent  children.  Such  persons  must 
either  choose  gainful  employment  or  fall  back  upon 
private  or  public  charity.  The  second  group  comprises 
the  wives  of  those  who  have  fairly  good  incomes.  Such 
women  desire  to  improve  their  economic  and  social  status, 
to  become  more  or  less  independent  of  their  husbands' 
earnings,  or  to  escape  what  appears  to  them  to  be  the 
monotony  and  inadequacy  of  domestic  life.  Sometimes, 
too,  married  women  in  this  group  enter  outside  occupa- 
tions temporarily,  in  order  to  augment  the  husband's  in- 
come, with  a  view  to  purchasing  a  home  or  for  some  other 
such  purpose.  The  third  group  of  married  women  workers 
consists  of  those  whose  husbands  receive  very  inadequate 
wages,  whose  work  is  casual  or  irregular,  or  who  are 
unemployed.  "Irregular  employment  of  men  is  not  only 
an  evil  per  se,  but  is  a  direct  inducement  of  married 
women's  work."  The  greater  the  economic  insecurity 
of  the  husband,  the  greater  is  the  tendency  for  the  wife 
to  become  and  remain  a  wage-earner." 

The  employment  of  married  women  is  increasing 
rapidly,  especially  among  the  negro  and  recent  immigrant 
races  in  the  United  States.  While  all  employment  of 

"British  War  Cabinet  Committee,  op.  cit.,  pp.  23,  24. 


176  Women  in  Industry 

married  women  may  not  be  injurious,  there  can  be  no 
doubt  that  when  mothers  have  to  assume  the  responsibili- 
ties of  domestic  duties  and  industrial  employment,  the 
physical  and  mental  effects  are  serious.  It  is  a  primary 
duty  of  society  to  make  unnecessary  the  industrial  em- 
ployment of  mothers,  either  through  the  provision  of 
mothers'  pensions  or  through  the  legal  guaranty  of  a 
living  wage  for  male  workers.  So  long  as  married  women 
are  employed,  society  must  protect  them  from  exploita- 
tion. "The  married  woman  in  industry,  who  is  forced 
to  work  because  of  economic  necessity,  brought  about  by 
her  husband's  death,  incapacity,  or  inability  to  earn  an 
adequate  wage  for  himself  and  his  family,  must  usually 
take  whatever  job  she  can  get,  without  too  much  question 
of  wages  or  hours.  But  she  is  the  one  worker  in  all  the 
group  who  most  needs  the  protection  of  the  law,  for  the 
care  of  her  children  and  household  will  take  many  hours 
and  much  strength,  and  her  health  will  suffer  if  hours 
of  work  are  not  limited."  27 

The  Sweating  System  and  Industrial  Homework. — In 
1888,  a  committee  of  the  House  of  Lords  in  England 
reported  that  the  sweating  system  may  exist  under  any 
method  of  employment  when  "the  conditions  of  the  labor 
market  afford  abundant  materials  to  supply  an  un- 
scrupulous employer  with  workers  helplessly  dependent 
upon  him."  In  this  general  sense  sweating  consists  in 
taking  advantage  of  the  poorer  and  more  helpless  classes 
of  workers.  A  report  on  the  sweating  system  of  Chicago, 
which  was  issued  by  the  Bureau  of  Labor  Statistics  of 
Illinois,  in  1892,  defined  sweating  as  the  farming  out, 
by  competing  manufacturers  to  competing  contractors, 
of  the  material  for  garments,  which  in  turn  is  distributed 
among  competing  men  and  women  to  be  made  up.  The 
middleman  or  contractor  is  the  sweater,  though  he  himself 
may  be  subjected  to  pressure  from  above,  and  his  em- 
ployees are  the  sweated  or  oppressed.  The  sweater  con- 
tracts to  make  up  certain  garments  at  a  given  price  per 

11 U.  S.  Women's  Bureau,  Health  Problems  of  Women  in  Industry, 
Bulletin  18,  1921,  p.  5. 


Women  in  Industry  177 

piece,  and  then  hires  other  people  to  do  the  work  at  a 
less  price.  His  profit  lies  in  the  difference  between  th£ 
two  prices.  The  committee  of  the  House  of  Lords  already; 
referred  to  described  the  sweater  as  follows:  "In  some 
cases  the  man  known  as  the  sweater  is  merely  an  agent, 
knowing  nothing  of  the  business.  Sometimes  he  acts  the 
part  of  a  foreman,  and  directs  the  work  of  every  branch, 
undertaking  the  whole  business  thoroughly.  Sometimes 
he  works  as  hard  as  any  of  his  employees. ' ' 

There  are  two  principal  methods  of  carrying  on  sweated 
industry:  (1)  The  sweater  may  furnish  shop  room  and 
machines  to  his  employees,  and  (2)  he  may  allow  others, 
usually  finishers,  to  take  the  work  to  their  living  and 
lodging  rooms  in  the  tenements.  Under  the  second  form 
the  individuals  may  work  in  their  own  homes,  and  the 
employee  force  may  consist  entirely  of  the  immediate 
family,  or  certain  individuals  outside  the  family  may  be 
employed  to  perform  particular  kinds  of  work.  The 
sweating  system  flourishes  where  population  is  congested, 
as  in  our  great  American  cities;  where  contract  work  is 
practicable ;  and  where  the  methods  of  production  do  not 
involve  a  heavy  investment  in  machinery.  Under  what- 
ever form  sweated  industry  is  carried  on,  the  resultant 
evils  appear  to  be  the  same  everywhere;  namely,  low 
wage  scales,  excessive  hours  of  labor,  speeded-up  workers, 
unsanitary  conditions  of  employment,  and  the  employment 
of  very  young  children  and  of  women.  Because  of  these 
evils,  public  attention  has  been  directed  to  homework 
and  other  forms  of  sweating,  partly  on  economic  grounds 
to  secure  proper  rates  of  compensation  for  such  workers, 
and  partly  on  hygienic  or  sanitary  grounds  in  order  that 
work  may  not  be  done  under  conditions  that  are  inimical 
to  the  public  health.  The  dangers  to  the  health  of  the 
consuming  public  arc  obvious  when  one  remembers  that 
production  under  sweatshop  methods  takes  place  fre- 
quently in  overcrowded  tenement  homes  in  which  all  kinds 
of  contagious  diseases  develop  because  of  the  lack  of 
sanitation.  Even  when  the  cutting  of  garments  is  done 
in  " inside  shops"  of  the  manufacturer,  finishing  takes 


178  Women  in  Industry 

place  in  the  homes,  and  the  goods  are  distributed  to  the 
public  germ-laden  and  unclean. 

The  sweatshop  system  is  not  a  new  evil  in  industry. 
The  Illinois  report  on  sweating  referred  to  already,  points 
out  that  "the  sweating  system  is  one  of  respectable 
antiquity,  and  is  a  surviving  remnant  of  the  industrial 
system  which  preceded  the  factory  system,  when  industry 
was  conducted  chiefly  on  the  piece-price  plan  in  small 
shops  qr  the  homes  of  the  workers."  The  problem  has 
commanded  public  attention  in  England  for  several  cen- 
turies, while  in  the  United  States  it  was  one  of  the  evils 
ushered  in  with  the  factory  system.  In  the  early  period 
work  was  given  out  by  the  manufacturers  in  the  larger 
cities  to  be  done  in  the  homes  and  the  small  shops.  Straw 
hat  making  was  largely  homework.  A  record  of  1846 
states  that  the  best  women  workers  could  not  earn  more 
than  50  cents  a  day  and  the  average  was  25  cents,  while 
the  braid  was  generally  made  by  children  from  six  to 
twelve  years  of  age.28  The  sweating  system  was  en- 
couraged in  this  country  by  the  presence  of  immigrants 
even  before  the  last  quarter  of  the  nineteenth  century, 
but  it  was  not  until  the  latter  period  that  the  problem 
assumed  such  serious  proportions  as  to  arouse  public 
opinion.  In  this  as  in  many  other  economic  evils,  the  new 
immigration  was  a  responsible  factor.  With  the  coming 
of  the  Jews  from  Hungary,  Germany,  Austria,  Russia, 
and  Poland  subsequent  to  1880,  the  practice  of  sweating 
took  on  a  new  lease  of  life.  Later,  the  Italians  and  other 
nationalities  became  victims  of  the  system. 

The  sweatshop  system  has  been  most  persistent  in  the 
clothing  industry,  although  it  has  been  introduced  into 
other  lines  of  manufacturing — cigar  making,  bakeries, 
laundries,  artificial  flower  and  feather  making,  paper  box 
making,  et  cetera.  The  conditions  that  have  conduced 
to  sweating  in  the  United  States  include:  (1)  an  over- 
supply  of  cheap  labor,  made  possible  by  the  constant 
influx  of  immigrants  who  are  unable  to  speak  English 
and  who,  because  of  financial  destitution,  must  accept 

28  Edith  Abbott,  Women  in  Industry,  pp.  74,  75. 


Women  in  Industry  179 

employment  regardless  of  the  conditions  that  prevail; 
and  (2)  the  advantageous  position  of  the  small  shop  in 
certain  industries.  The  contractor  lives  in  the  neighbor- 
hood of  the  immigrants,  is  familiar  with  their  languages, 
and  is  able  to  secure  them  in  times  of  business  activity. 
Because  of  this  intimate  contact,  the  manufacturers,  in- 
stead of  employing  foremen  to  supervise  production  in 
their  own  establishments,  give  their  work  to  contractors 
who  distribute  it  among  the  poor,  chiefly  women  and  chil- 
dren, in  the  tenements.  The  supremacy  of  the  small  shop 
is  accounted  for  by  the  fact  that  in  it  are  found  the  worst 
conditions  of  labor — pitiably  low  wages,  excessive  hours 
of  labor,  and  oppressive  methods  of  compensation.  Where 
the  industry  is  highly  seasonal  heavy  investment  in 
fixed  capital  is  frequently  uneconomical,  since  it  must 
lie  idle  much  of  the  year.  This  encourages  the  manufac- 
turer to  shift  the  burden  to  the  contractor,  who  finds  the 
homes  of  the  poor  or  the  small  shop  more  economical 
than  the  large  factory.  Little  capital  is  required  by  such 
contractors,  and  competition  is  often  very  keen,  resulting 
in  the  reduction  of  the  price  paid  by  manufacturers  to 
them  for  their  work  and  in  the  wages  paid  to  their  vic- 
tims. Homework  is  favored  by  contractors  because:  (1) 
It  is  difficult  to  regulate  legally  conditions  within  the 
home;  (2)  an  abundant  supply  of  cheap  labor  is  made 
available;  and  (3)  there  are  no  overhead  charges. 

Where  homework  is  done  by  the  wives  of  wage-earners 
having  a  reasonable  income,  and  merely  for  the  purpose 
of  getting  pin-money,  or  where  the  work  is  carried  on  in 
large  inside  sjiops  which  are  subject  to  regulation,  the  evils 
of  the  sweating  system  are  not  so  serious.  The  remunera- 
tion of  homeworkers  and  small  shop  workers,  however,  has 
sometimes  reached  a  level  which  has  shocked  an  intelligent 
public  opinion.  An  abundant  supply  of  labor  is  not  the 
only  cause  of  low  wages;  lack  of  training  and  irregular 
methods  of  work  have  been  equally  responsible.  Piece- 
rates  paid  to  industrial  homeworkers  and  others  employed 
under  the  sweatshop  system  are  always  inadequate.  The 
conditions  of  employment  are  often  described  as  brutal, 


180  Women  in  Industry 

in  no  degree  conforming  to  the  normal  requirements  oT 
decency  and  comfort  which  should  obtain  among  the 
workers  in  an  enlightened  nation.  The  persistence  of 
such  conditions  may  be  attributed  to  the  practical  im- 
possibility of  organizing  employees  in  the  sweated  trades, 
especially  those  engaged  in  industrial  homework.  The 
difficulties  of  organizing  homeworkers  are  well-known, 
and  in  the  past  trade-union  propaganda  among  these 
workers  has  met  with  little  success.  Attempts  have  been 
made  to  bring  such  workers  within  labor  organizations, 
because  the  homeworkers  and  factory  workers  are  often 
in  competition,  thus  depressing  the  remuneration  of  the 
latter  to  a  level  approaching  that  of  the  former.  In  the 
United  States  the  influx  of  immigrants  who  do  not  speal? 
English,  and  the  isolation  of  industrial  homeworkers  have 
been  barriers  to  trade  unionism. 

The  clothing  industry  in  the  United  States  presents 
typical  methods  of  sweating,  particularly  as  to  homework. 
There  are  two  kinds  of  such  work;  namely,  (1)  the  mak- 
ing of  custom  tailored  garments  in  small  shops,  and  (2) 
finishing  garments  for  contract  shops,  the  work  being 
done  chiefly  by  women.  The  clothing  industry  is  in 
the  hands  of  three  groups  of  manufacturers — wholesale 
clothiers,  tailors-to-the-trade  in  special  order  houses,  and 
custom  or  merchant  tailors.  A  study  of  women  workers! 
in  factories  of  Cincinnati,  made  by  the  Consumers'  League 
of  Cincinnati,  reveals  something  of  the  nature  and  present 
method  of  the  sweating  system.  Seventy-two  contract 
shops  and  108  custom  tailor  shops  wer,e  included  in  the 
investigation.  The  larger  contract  shops  were  inspected 
regularly  by  the  factory  inspectors,  but  the  smaller  con- 
tract shops  and  the  majority  of  the  tailor  shops  were 
under  no  supervision.  Twenty  of  the  city  contract  shops 
admitted  that  they  used  home  finishers,  while  in  15  shops 
of  one  rural  community  every  proprietor  had  a  number 
of  home  finishers,  and  it  was  stated  by  some  that  "nearly 
every  woman  in  town  does  homework."  Very  few  of 
the  employers  knew  where  the  homes  of  the  finishers 
were.  A  large  number  of  the  employees  were  dependent 


Women  in  Industry  181 

women  and  children,  although  many  women  and  children 
were  forced  to  supplement  the  husband's  income.  In 
every  instance  work  was  done  in  the  living  room,  which 
was  usually  the  dining  room  and  kitchen  combined,  and 
which  in  some  cases  was  also  the  bedroom.  Varying 
degrees  of  comfort  and  cleanliness  were  found  in  these 
homes. 

The  rates  of  pay  varied  with  the  individual  contractors, 
but  were  lower  than  those  prevailing  in  the  factories 
for  the  same  kind  of  work.  One  woman,  a  coat  finisher, 
was  paid  9  cents  a  coat  and  earned  from  50  cents  to 
$1.70  a  week,  depending  upon  the  amount  of  work  she 
could  get.  It  took  one  hour  to  finish  a  coat,  and  the 
finishing  was  paid  for  according  to  style  and  kind  of 
work  done,  some  receiving  as  little  as  30  cents  a  dozen 
and  some  as  high  as  $1.44  a  dozen.  Pants  finishers  were 
paid  according  to  the  amount  of  work  required,  the  pay 
ranging  from  4  cents  to  25  cents  a  pair.  One  pants 
finisher  stated  that  she  and  her  mother  working  without 
interruption  could  earn  $1.25  a  day.  The  largest  earn- 
ings reported  by  a  finisher  were  those  of  a  vest  maker 
who  received  15  cents  an  hour  and  in  busy  seasons  worked 
nine  hours  a  day.29 

A  study  of  industrial  homework  in  Milwaukee  showed 
that  on  July  1,  1920,  the  number  of  homeworkers  was 
2,907,  all  females  with  one  or  two  exceptions.  The  largest 
proportion  of  these  workers,  2,514,  or  86.5  per  cent,  were 
connected  with  the  textile  industries,  and  of  this  number 
1,722,  or  59.3  per  cent,  were  workers  on  hand  and  machine- 
knit  goods.  'About  10  per  cent  were  employed  by  the 
paper-goods  industry  and  nearly  3  per  cent  by  the  leather- 
goods  manufacturers.  Of  142  assistants  to  homeworkers, 
51  per  cent  were  under  16  years  of  age;  in  the  textile 
industry  42  per  cent  were  under  16.  Of  603  workers 
for  whom  data  were  gathered,  18  per  cent  received  under 
10  cents  an  hour;  54  per  cent  received  10  to  20  cents; 
23  per  cent,  20  to  30  cents ;  and  7  per  cent,  over  30  cents. 

"Annette  Mann,  Women  Workers  in  Factories,  Publication  of  the 
Consumers'  League  of  Cincinnati,  1918,  pp.  34-39. 


182  Women  in  Industry 

Of  the  more  than  600  workers  studied,  22  per  cent  re- 
ceived less  than  $10  per  month;  47  per  cent,  from  $10 
to  $20;  20  per  cent,  from  $20  to  $30;  5  per  cent,  from 
$30  to  $40 ;  and  6  per  cent,  over  $40.30 

The  actual  amount  of  homework  in  the  clothing  indus- 
try in  the  United  States  is  not  known  definitely,  but  there 
is  every  reason  to  believe  that  it  is  considerable.  The 
chief  cause  for  its  existence  is  its  benefit  to  employers, 
who  save  overhead  expenses  and  get  their  work  done  at 
a  lower  rate  than  obtains  in  the  factory,  which  is  under 
more  or  less  strict  regulation  and  in  which  the  workers 
are  often  well  organized.  The  consumer  gains  nothing 
by  the  reduced  cost  of  production.  He  pays  the  market 
price  and  runs  the  risk  of  contracting  disease  by  pur- 
chasing clothing  made  in  all  sorts  of  homes.  Custom 
tailored  garments,  although  higher  priced,  are  in  many 
cases  made  under  similar  conditions  in  home  tailor  shops. 
From  evidence  secured  in  the  Cincinnati  investigation, 
there  are  very  sound  arguments  for  abolishing  every  form 
of  homework,  since:  (1)  Clothing  sent  out  to  homes  is 
often  made  or  finished  under  unsanitary  conditions — bad 
lighting,  poor  ventilation,  and  filth;  (2)  the  danger  to 
the  public  health  is  immeasurable,  because  disease  is 
spread  by  garments  sent  to  homes  which  are  under  no 
legal  supervision;  and  (3)  the  low  wages  paid  to  home- 
workers  tends  to  reduce  the  wages  in  factories  and  thus 
to  lower  the  standard  of  living  for  both  kinds  of  workers. 
Even  where  inspection  of  homework  is  provided  it  is 
extremely  difficult  to  carry  it  out  effectively. 

Why  are  the  wages  of  homeworkers  so  low  when  the 
employer  does  not  have  to  furnish  premises,  heat,  or  light  ? 
Such  a  discrepancy  cannot  be  explained  by  the  much- 
abused  "cost  of  production"  argument.  Primarily,  it  is 
a  case  of  pure  exploitation  of  those  who  are  economically 
weak.  Unscrupulous  manufacturers  do  not  always  hesi- 
tate to  crush  their  fellows  under  a  condition  of  unequal 
bargaining  power.  But  the  sweater's  position  is  not  free 
from  difficulties,  since  his  cost  of  production  may  be  high. 

"Monthly  Labor  Beview,  April,  1921,  pp.  69,  70. 


Women  in  Industry  183 

(1)  The  cost  of  distributing  work  among  homeworkers 
is  often  a  considerable  amount.  When  the  workers  live 
in  the  congested  cities  this  cost  is  not  so  great;  it  is 
heaviest  when  the  workers  dwell  in  rural  districts,  and 
the  work  is  distributed  and  collected  by  agents.  (2)  The 
distribution  of  work  in  small  lots,  even  in  the  congested 
city  tenements,  the  absence  of  control  over  its  execution 
and  uncertainty  as  regards  its  punctual  return  are  dis- 
advantages which  may  involve  a  monetary  outlay  that 
will  counterbalance  the  overhead  charges  incidental  to 
factory  work.  For  the  convenience  of  working  at  home, 
however,  many  homeworkers  will  accept  less  pay  than 
they  could  actually  command  by  entering  the  factory, 
so  that  the  factory  worker  and  the  homeworker  maVj 
offer  the  same  services  at  different  rates  of  remunera- 
tion.31 Low  wage  standards  for  homeworkers  more  than 
compensate  for  the  relatively  high  cost  of  distributing 
cloth  and  collecting  finished  garments. 

While  the  practice  of  sweating  will  continue  to  exist, 
for  some  time  at  least,  there  is  every  indication  that  a 
decline  has  set  in.  This  is  particularly  true  of  homework; 
which  certain  forces  and  tendencies  in  modern  economic 
life  are  making  obsolete.  "The  system  by  which  work 
is  given  out  to  be  done  off  the  employer's  premises  and 
beyond  his  direct  supervision  is  opposed  to  the  centraliz- 
ing and  standardizing  tendencies  of  modern  industry,  and 
employers  protest  in  increasing  numbers  that  they  cannot 
be  bothered  with  it."  Far  more  important  than  these 
economic  forces,  however,  has  been  the  influence  of  legis- 
lation and  consumers'  organizations  which,  in  Australasia, 
Great  Britain,  and  the  United  States,  have  discouraged 
the  sweating  system.  The  legal  minimum  wage  practically 
means  death  to  sweating.  Education  and  publicity  are 
effective  correctives.  In  the  United  States  public  opinion 
against  sweating  has  been  crystallized  through  the  Na- 
tional Consumers'  League  which  approves,  by  means  of 
its  "White  List,"  mercantile  establishments  that  are  fair 
to  their  workers  and  maintain  desirable  conditions  of 

*  British  Ministry  of  Reconstruction,  op.  cit.,  p.  64. 


184  Women  in  Industry 

employment,  and,  by  means  of  the  "Consumers'  League 
Label,"  approves  the  products  of  manufacturing  establish- 
ments operated  in  accordance  with  the  principles  of  (1) 
obedience  to  the  factory  laws,  (2)  all  goods  manufactured 
on  the  premises  of  the  employer,  (3)  no  overtime,  and  (4) 
no  children  under  16  years  of  age  employed.  The 
Women's  Bureau  of  the  United  States  Department  of 
Labor  is  doing  an  excellent  work  along  the  line  of  in- 
vestigation and  recommendation  of  standards  of  employ- 
ment. The  union  label  is  also  used  widely  to  discourage 
the  consumption  of  sweatshop  products  and  to  stimulate 
consumption  of  commodities  produced  in  union  shops. 
Education  of  immigrant  children  and  Americanization 
of  adult  immigrants  will  destroy  the  present  separation 
of  foreigners  from  America's  cherished  institutions  and 
standards,  and  will  do  much  to  abolish  sweating.  Regu- 
larization  of  production  will  tend  to  eliminate  the  evils 
of  sweating,  and  the  growth  of  large-scale  industries  will 
do  much  to  eliminate  the  small  shop  and  stabilize  the  labor 
market. 

A  final  aid  to  the  emancipation  of  the  workers  from 
sweatshop  conditions  is  the  spread  of  organization.  The 
garment  workers  in  the  United  States  have  achieved  a 
remarkable  degree  of  efficiency  in  organization  and  col- 
lective bargaining,  and  the  chainworkers  in  England 
have  commenced  to  form  unions,  which  suggests  that  in 
the  future  the  sweated  workers  may  be  less  helpless  than 
they  have  been  in  the  past.  Legal  regulation  of  home- 
work and  the  small  shop  has  been  opposed  on  the  grounds 
that  it  is  an  arbitrary  exercise  of  power,  and  constitutes 
an  oppressive  measure.  Increasing  recognition  of  the 
paramount  interests  of  society,  however,  has  led  to  wiser 
and  more  progressive  counsels.  The  fact  that  such  a 
system  of  employment  tends  inevitably  to  depress  the 
wages  of  better-organized  workers,  to  lower  the  standard 
of  living,  and  is  carried  on  under  conditions  that  are 
dangerous  to  the  public  health,  is  sufficient  justification 
for  legislative  control. 

Standards  of  Employment. — The  foregoing  discussion 


Women  in  Industry  185 

of  the  various  aspects  of  the  problems  incident  to  the 
employment  of  women  in  industry  suggests  the  necessity 
for  the  formulation  of  desired  standards  of  work.  Cer- 
tain standards  have  been  set  forth  in  Great  Britain  and 
the  United  States  which,  when  applied,  will  improve  ma- 
terially the  conditions  of  employment  for  women  workers. 
Certain  conditions  are  prescribed  concerning  hours  of 
labor,  wages,  physical  conditions  of  employment,  home- 
work, and  so  forth.32 

1.  Hours  of  Labor. — For  reasons  already  suggested,  no 
woman  should  be  permitted  to  work  more  than  eight 
hours  in  any  one  day  or  forty-eight  hours  in  any  one 
week.     Moreover,  the  time  when  the  work  of  women 
employees  shall  begin  and  end,  and  the  time  allowed 
for  meals  should  be  posted  in  a  conspicuous  place  in  each 
workroom,  and  a  record  kept  of  the  overtime  of  each 
woman   worker.     Overtime   should   be  restricted,   if  not 
abolished.    Requirements  concerning  hours  should  include 
also  the  observance  of  a  half-holiday  on  Saturday,  one 
day  of  rest  in  seven,  at  least  three-quarters  of  an  hour 
for  meal-time,  a  rest  period  of  at  least  ten  minutes  in  the 
middle  of  each  working  period  without  adding  to  the  length 
of  the  working-day,  and  the  prohibition  of  all  employment 
of  women  between  the  hours  of  10  p.  m.  and  6  a.  m. 

2.  Wages. — Whenever  women  perform  the  same  tasks 
as  men  with  equal  productivity,  the  principle  of  equal  pay 
for  equal  work  should  be  applied.    Difference  in  wage  rates 
should  be  based  upon  the  difference  in  output  and  not  set 
arbitrarily  as  a  result  of  the  inefficient  bargaining  power 
of  women  employees.     At  all  times  wages  should  be  es- 
tablished on  the  basis  of  occupation  and  not  on  the  basis 
of  sex,  and  the  minimum  scale  of  wages  should  cover  the 
cost  of  living  for  dependents  and  not  merely  for  the  in- 
dividual. 

3.  Working    Conditions. — There    should    be    adequate 
provisions  for  comfort  and  sanitation,  as  well  as  pro- 

"See  First  Annual  Report  of  tho  Director  of  Women  in  Industry 
Service,  U.  8.  Department  of  Labor,  1919,  and  the  reports  of  British 
committees  already  cited. 


V 

186  Women  in  Industry 

tection  of  the  moral  life  of  the  workers.  This  requires 
proper  washing  and  toilet  facilities,  rest  rooms,  ventilation, 
lighting,  and  heat,  and  provision  for  lunch  outside  the 
workroom.  Moreover,  there  must  be  safeguards  against 
continuous  standing  and  continuous  sitting,  dangerous 
machinery,  fire,  and  exposure  to  dust  and  fumes.  The 
health  of  women  workers,  as  we  have  seen,  is  endangered 
by  constant  standing  or  other  posture  causing  physical 
strain,  repeated  lifting  of  heavy  weights,  operation  of 
mechanical  devices  requiring  undue  strength  and  constant 
attention,  exposure  to  excessive  heat  or  cold,  and  exposure 
to  various  occupational  poisons. 

4.  Homework. — No  work  should  be  allowed  in  rooms 
used  for  living  and  sleeping  purposes,  or  in  rooms  con- 
nected directly  with  living  or  sleeping  rooms  in  any  dwell- 
ing or  tenement.    Such  work  makes  easy  the  exploitation 
of  women  and  children  and  is  dangerous  to  the  public 
health. 

5.  Regularity  of  Employment. — Every  effort   must   be 
made  by  employers  and  the  state  to  regularize  production 
in  industries  employing  women.     The  trades  into  which 
women  have  entered  in  large  numbers  have  been  highly 
seasonal,  and  much  distress  has  resulted  from  periodical 
unemployment.    Economic,  moral,  and  social  considerations 
demand  that  women  be  given  greater  economic  security. 

6.  Collective    Bargaining. — Protective    legislation    will 
continue  to  safeguard  the  interests  of  women  workers,  but 
this  should  not  preclude   the  introduction  of  a  greater 
measure  of  control  over  conditions  of  employment  through 
organization  and  collective  bargaining.    Such  a  measure 
is  the  soundest  foundation  of  industrial  democracy  and 
the  surest  protection  against  exploitation.33 

Conclusions. — Women  have  become  a  permanent  part 
of  the  working  forces  in  modern  industry,  and  the  num- 
ber of  occupations  open  to  them  is  increasing.  Their 
condition  in  industry  may  be  improved  by :  ( 1 )  the  volun- 
tary action  of  the  employer,  (2)  the  interference  of  the 

*  U.  S.  Women 's  Bureau,  Standards  for  the  Employment  of  Women 
in  Industry,  1921,  Bulletin  No.  3. 


Women  in  Industry  187 

state,  and  (3)  unionization  and  collective  bargaining  on 
the  part  of  the  women  themselves.  It  is  hardly  practicable 
to  depend  upon  the  voluntary  action  of  the  employer, 
since  honest  and  scrupulous  employers  would  suffer  on 
account  of  the  backwardness  and  selfishness  of  unscrupulous 
ones.  While  the  interference  of  the  state  has  done  and 
will  continue  to  do  much,  there  has  been  considerable 
opposition  to  such  legal  action,  and  the  enforcement  of 
protective  laws  frequently  is  lax.  It  becomes  necessary, 
therefore,  to  supplement  voluntary  action  of  employers 
and  legal  action  of  the  state  with  effective  organization 
of  the  women  themselves.  The  increasing  political  influ- 
ence of  women  doubtless  will  do  much  to  secure  not  only 
greater  industrial  opportunity  but  also  a  larger  measure 
of  industrial  justice.  A  voice  for  women  in  the  deter- 
mination of  the  conditions  of  employment  is  economically 
sound  and  socially  desirable. 

SELECTED  REFERENCES 

ABBOTT,  EDITH,  Women  in  Industry,  1910. 

ADAMS,  T.  S.,  AND  SUMNER,  H.  L.,  Labor  Problems,  1905,  Chaps. 
II  and  IV. 

BLISS,  W.  D.  P.  (editor),  New  Encyclopedia  of  Social  Reform, 
1910,  Art.  on  Sweatshops. 

BOLEN,  G.  L.,  Getting  a  Living,  1903,  Chap.  XVIII. 

BOOTH,  CHARLES,  Life  and  Labor  of  the  People  in  London,  1903, 
4:328-347. 

CARLTON,  F.  T.,  History  and  Problems  of  Organized  Labor, 
revised  edition,  1920,  Chaps.  XIII  and  XV. 

CONSUMERS'  LEAGUE  OF  CINCINNATI,  Women  Workers  in  Fac- 
tories, 1918. 

QOLDMARK,  JOSEPHINE,  Fatigue  and  Efficiency,  1912,  Chaps.  Ill 
and  X. 

GREAT  BRITAIN,  MINISTRY  OP  RECONSTRUCTION,  Women's  Ad- 
visory Committee,  Report  of  Subcommittee  on  Women's  Em- 
ployment, Cd.  199,  1919. 

GREAT  BRITAIN,  WAR  CABINET,  Report  of  the  Committee  on 
Women  in  Industry,  Cd.  135,  1919;  Cd.  167,  1919. 

ILLINOIS,  Report  of  the  Illinois  Industrial  Survey  on  Hours  and 
Health  of  Women  Workers,  1918,  1919. 

KELLEY,  FLORENCE,  Some  Ethical  Gains  Through  Legislation, 
1905,  pp.  209-255. 


188  Women  in  Industry 

KELLOR,  F.  A.,  Out  of  Work;  A  Study  of  Unemployment,  1915, 
Chap.  II. 

KNOEPPEL,  C.  E.,  Women  in  Industry,  1918. 

LATTIMORE,  F.  L.,  AND  TRENT,  R.  S.,  Legal  Recognition  of  Indus- 
trial Women,  1919. 

LIPPMANN,  WALTER,  The  Campaign  Against  Sweating,  New  Re- 
public, March  27,  1915. 

NATIONAL  CONSUMERS'  LEAGUE,  Bulletins  and  Studies. 

NEW  YORK,  STATE  DEPARTMENT  OP  LABOR,  Bureau  of  Women  in 
Industry,  Bulletin  93,  1919. 

TEAD,  ORDWAY,  AND  METCALP,  H.  C.,  Personnel  Administration, 
1920,  Chap.  X. 

UNITED  STATES  BUREAU  OP  LABOR,  Report  on  Conditions  oj 
Women  and  Child  Wage-Earners  in  the  United  States,  61st 
Cong.,  2d  sess.,  Senate  Doc.  645. 

UNITED  STATES  CHILDREN'S  BUREAU,  Industrial  Home  Work  of 
Children,  Bureau  Publications,  No.  100,  1922. 

WATKINS,  G.  S.,  Labor  Problems  and  Labor  Administration  in 
the  United  States  During  the  World  War,  1919,  pp.  68-78. 

WEBB,  SIDNEY,  AND  WEBB,  BEATRICE,  Industrial  Democracy,  1920 
edition,  pp.  749-760. 


CHAPTER  X 
HUMAN  WASTE  IN  INDUSTRY 

The  Human  Factor  in  Production. — During  the  nine- 
teenth century  industrial  development  proceeded  so 
rapidly  in  Europe  and  America  that  the  necessity  and 
importance  of  protecting  and  conserving  the  human  ele- 
ment in  production  were  scarcely  recognized  by  employ- 
ers. Economy  in  the  application  of  capital,  replacement 
of  worn-out  machinery,  and  conservation  of  natural  re- 
sources received  careful  consideration.  The  waste  of 
human  life,  the  accumulation  of  fatigue,  and  destruction 
of  health  in  industry  received  no  such  attention,  and  only 
in  recent  years,  often  under  the  compulsion  of  law,  have 
the  buyers  and  users  of  human  labor  recognized  with  any 
degree  of  intelligence  the  relation  that  obtains  between 
health  and  efficiency. 

Employers  are  beginning  to  take  an  interest  in  preven- 
tive medicine,  personal  and  social  hygiene,  factory  sani- 
tation and  safety,  emergency  surgery  and  first-aid, 
laboratory  tests  and  hospital  care,  dental  prophylaxis, 
mental  hygiene,  and  other  protective  measures,  because 
they  are  convinced  that  a  definite  relation  exists  between 
the  health  of  the  workers  and  efficiency  in  production. 
Insistent  demand  for  increased  output,  reduction  of  labor 
turnover,  and  a  stabilized  employee  force  is  resulting  in 
increasing  protection  of  the  workers.  Careful  husbanding 
of  human  resources  in  industry,  however,  is  likely  to  char- 
acterize periods  of  industrial  prosperity  when  labor  is 
scarce  and  to  decline  in  periods  of  industrial  depression 
when  labor  is  abundant.  Society,  therefore,  cannot  leave 
entirely  to  the  employers  the  important  business  of  safe- 
guarding the  workers  in  industry.  Industrial  accidents 

isy 


190  Human  Waste  in  Industry 

and  occupational  diseases  are  social  problems  and  not 
matters  of  private  concern  only.  In  the  wake  of  modern 
industrialism  accidents  and  death  have  followed,  exacting 
from  the  wage-earning  classes  enormous  toll  in  human 
misery.  Protection  of  the  nation's  workers  is  the  founda- 
tion of  economic  efficiency  and  social  progress.  There 
is  no  more  serious  phase  of  the  labor  problem  than  the 
wastes  of  human  health  and  life  incident  to  the  production 
of  wealth.  In  describing  this  problem  the  late  John 
Mitchell  stated:  "While  the  bread  of  the  laborer  is  earned 
in  the  sweat  of  his  brow,  it  is  eaten  in  the  peril  of  his 
life.  Whether  he  works  upon  the  sea,  upon  the  earth, 
or  in  the  mines  underneath  the  earth,  the  laborer  con- 
stantly faces  imminent  death;  and  his  danger  increases 
with  the  progress  of  the  age.  With  each  new  invention 
the  number  of  killed  and  injured  rises.  .  .  .  Many  are 
killed  without  violence;  thousands  of  wage-earners  lose 
their  lives  in  factories,  mills,  and  mines,  without  the  in- 
quest of  a  coroner.  The  slow  death  that  comes  from 
working  in  a  vitiated  atmosphere,  from  laboring  inces- 
santly in  constrained  and  unnatural  postures,  from  con- 
stant contact  of  the  hands  and  lips  with  poisonous  sub- 
stances; lastly,  the  death  which  comes  from  prolonged 
exposure  to  inclement  weather,  from  over-exertion  and 
under-nutrition,  swells  beyond  computation  the  unnum- 
bered victims  of  restless  progress."1 

Extent  of  Industrial  Accidents. — It  is  impossible  to 
measure  accurately  the  human  waste  in  industry.  In  the 
United  States  accurate  and  complete  statistics  of  indus- 
trial accidents  and  occupational  diseases  are  not  available, 
although,  with  the  spread  of  compulsory  workmen's  com- 
pensation laws,  an  increasing  volume  of  such  information 
is  becoming  accessible.  Many  estimates  have  been  made 
by  those  who  have  conducted  special  investigations.  In 
1908,  Dr.  Frederick  L.  Hoffman,  statistician  of  the  Pru- 
dential Life  Insurance  Company,  estimated  that  the  num- 
ber of  fatal  and  nonfatal  injuries  to  workers  would  in- 

1  Annals  of  the  American  Academy,  Vol.  XXXVIII,  No.  1,  July, 
1911,  pp.  76,  77. 


Human  Waste  in  Industry  191 

elude  30,000  to  35,000  deaths  per  annum,  and  2,000,000 
casualties  of  all  kinds.  Basing  his  data  on  insurance 
experience  with  about  38,000,000  lives,  this  same  authority 
places  the  number  of  fatal  industrial  accidents  for  1913 
at  25,000,  and  the  number  of  injuries  involving  disability 
of  more  than  four  weeks  at  700,000.2  This  estimate  is 
undoubtedly  conservative.  Approximately  15,000  persons 
in  the  United  States  are  blind  as  a  result  of  accidents 
in  industry.  The  expense  of  supporting  these  blind  per- 
sons for  the  remainder  of  their  lives  is  estimated  at  $10,- 
000,000,  a  burden  which  must  fall  largely  on  relatives  or 
society.3  Recent  statistics  show  that  approximately  80,- 
000  deaths,  an  average  of  222  per  day,  result  from 
accidents  of  various  kinds  every  year  in  the  United  States 
alone.  In  1919,  according  to  data  prepared  by  the 
National  Safety  Council,  more  than  22,000  persons  were 
killed  and  over  500,000  injured  as  a  result  of  accidents 
in  American  industries.  If  complete  information  were 
available  it  would  probably  show  that  the  accident 
rate  for  the  whole  of  the  United  States  is  approximately 
58,000  a  month,  or  about  2,000  a  day.  Appalling  as  are 
the  losses  in  war,  they  do  not  equal  the  sacrifices  in  indus- 
try of  which  the  world  takes  little  or  no  account.  The 
distribution  of  industrial  accidents  is  shown  in  the  accom- 
panying table. 

Occupational  Distribution  of  Accidents. — Some  indus- 
tries are  more  responsible  for  the  volume  of  industrial 
accidents  than  others.  Metal  and  coal  mining  are  the 
most  hazardous  occupations,  while  railroading,  quarrying, 
and  lumbering  appear  among  those  which  exact  heavy 
tolls  in  suffering  and  life.  Dr.  Hoffman's  estimates,  given 
in  the  accompanying  table,  indicate  that  these  industries 
are  more  hazardous  than  enlistment  in  the  United  States 
Army,  and  from  two  to  three  times  as  dangerous  as  the 
average  for  all  occupations  in  which  male  workers  are 
employed.  It  will  be  noted  that  metal  mining  has  a 
fatality  rate  of  4.0  per  1,000,  coal  mining  3.5,  while 

*U.  8.  Bureau  of  Labor  StatiRticn,  Bulletin  No.  157,  pp.  5,  6. 
•Monthly  Labor  Review,  April,  1918,  p.  296. 


192 


Human  Waste  in  Industry 


general  manufacturing  has  only  0.25.  Official  investiga- 
tions in  more  recent  years  show  a  tendency  toward  a 
lowered  fatality  rate  in  these  industries.  Out  of  about 
153,000  accidents  reported  in  Pennsylvania,  in  1919,  over 
45,000  were  in  the  metal  and  metal-product  industry,  and 

ESTIMATE  OF  FATAL  INDUSTRIAL  ACCIDENTS  IN  THE  UNITED  STATES 
IN  1913,  BY  INDUSTRY  GROUPS 


Industry  Group 

Number  of 
Employees  * 

Fatal 
Industrial 
Accidents  * 

Rate 
Per 
1,000 

Males 
Metal  mining  

170,000 

680 

4  00 

Coal  mining  

750,000 

2,625 

3  50 

Fisheries  

150,000 

450 

3.00 

Navigation  

150,000 

450 

3.00 

Railroad  employees  

1,750,000 

4,200 

2  40 

Electricians  (light  and  power)  .... 
Navy  and  Marine  Corps  

68,000 
62,000.  . 

153 
115 

2.25 

1.85 

Quarrying.  . 

150,000 

225 

1  70 

Lumber  industry  

531,000 

797 

1  50 

Soldiers,  United  States  Army  .... 
Building  and  Construction  

73,000 
1,500,000 

109 

1,875 

1.49 
1.25 

Draymen,  teamsters,  etc  

686,000 

686 

1.00 

Street  railway  employees  

320,000 

320 

1.00 

Watchmen,  policemen,  firemen.  .  . 
Telephone  and  telegraph  (includ- 
ing linemen)  

200,000 
245,000 

150 
123 

.75 
.50 

Agricultural   pursuits,    including 
forestry  and  animal  husbandry. 
Manufacturing  (general)  

12,000,000 
7,277,000 

4,200 
1,819 

.35 

.25 

All  other  occupied  males  

4,678,000 

3,508 

.75 

All  occupied  males  

30,760,000 

22,515 

.73 

All  occupied  females  

7,200,000 

540 

.075 

*  Partly  estimated. 

over  26,000  were  in  public  service  industries.  Between 
1907  and  1920  almost  36,000  men  were  killed  in  coal 
mining  in  the  United  States,  an  indication  that  the  yearly 
toll  exacted  by  this  industry  alone  is  about  2,571  human 
lives.4  Of  the  approximately  10,000  persons  killed  on 
steam  railroads  in  the  United  States  every  year,  about 
•U.  S.  Bureau  of  Mines,  Technical  Paper  288,  1921,  p.  8. 


Human  Waste  in  Industry  193 

one-third  arc  employees,  while  employees  constitute  about 
90  per  cent  of  the  more  than  175,000  persons  injured.8 

The  Causes  of  Industrial  Accidents. — Industrial  acci- 
dents divide  themselves  into  "machinery  accidents,"  or 
those  which  result  from  inadequate  safeguards  of  ma- 
chines in  industry,  and  "nomnachinery  accidents,"  or 
those  which  result  from  causes  other  than  insufficient 
protection.  Recent  industrial  experiences  in  the  United 
Kingdom  and  in  the  United  States  have  shown  that  the 
factors  concerned  in  accident  production  are:  (1)  those 
of  pecsonal  origin,  such  as  nervous  and  muscular  coordina- 
tion in  relation  to  speed  of  production,  fatigue,  psychical 
influence,  nutrition,  and  alcohol  consumption;  and  (2) 
those  arising  from  external  factors  not  directly  under 
the  control  of  the  employees,  such  as  lighting,  tempera- 
ture, humidity,  ventilation,  defects  of  machinery,  and  the 
absence  of  protective  devices.  In  so  far  as  accidents 
arise  from  the  absence  of  proper  safeguards,  the  causes 
may  be  eliminated  by  strict  enforcement  of  factory  laws 
which  specify  what  protective  appliances  shall  be  in- 
stalled. Frequently,  however,  there  is  a  lack  of  standard- 
ization in  these  safeguards,  and  a  good  deal  of  controversy 
arises  between  state  factory  inspectors  and  the  employers 
as  to  what  may  be  considered  dangerous  machinery. 
Moreover,  it  is  not  an  uncommon  practice  for  employers 
to  put  forth  the  argument  that  safety  devices  of  this 
sort  add  heavily  to  the  expense  of  operation,  and  opposi- 
tion to  their  application  becomes  a  serious  obstacle  to 
the  reduction  of  accidents.  The  employer  is  a  responsible 
factor  in  th\>  causation  of  industrial  accidents  in  so  far 
as  he  fails  to  make  provision  against  them.  The  rapid 
development  of  machinery  and  machine  processes  often 
makes  it  difficult  for  the  employer  to  take  every  necessary; 
precaution  for  the  safety  of  his  employees.  Sometimes, 
moreover,  the  employer  is  ignorant  of  or  indifferent  to 
the  dangers  that  exist. 

If  complete  information  were  available,  one  would 
probably  find  that  the  major  portion  of  accidents  in  indus- 

•  Baaed  upon  figures  for  1917  and  1018. 


194 


Human  Waste  in  Industry 


trial  communities  is  caused  not  by  the  absence  of  adequate 
safeguards,  but  by  negligence,  carelessness,  want  of  in- 
struction, want  of  thought,  and  a  proper  appreciation  of 
the  dangers  involved  in  the  complex  and  intricate  machine 
processes  of  modern  industry.  The  workman  himself,  by 
his  carelessness,  may  be  responsible  for  a  large  percentage 
of  accidents,  or  the  negligence  of  his  fellow  workmen 
may  be  an  equally  responsible  factor.  Investigations  in 
the  United  Kingdom  during  the  war  led  to  the  conclusion 
that  the  majority  of  industrial  accidents  are  unavoidable, 
and  that  "accidents  depend  in  the  main  on  carelessness 
and  lack  of  attention  of  workers."  While  this  conclusion 
does  not  agree  with  the  results  of  impartial  studies  in 
the  United  States,  it  contains  a  very  important  element 
of  truth.  Inexperience  is  a  prominent  cause  of  human 
waste  in  industry,  as  is  also  the  inability  to  speak  English. 
"A  coal  miner's  safety  depends  largely  on  his  obeying 
the  mine  rules.  In  most  coal-mining  districts  in  the 
United  States  many  miners  and  laborers  are  non-English 
speaking  and  lack  experience  in  mining. ' ' 6  The  follow- 
ing table,  based  upon  data  collected  from  88  industrial 
plants  in  Illinois,  shows  the  relation  of  inexperience  to 
accidents. 


ACCIDENTS  AND  LENGTH  OF  SERVICE  7 


Length  of  Service 

Proportion 
of  Accidents, 
88  Firms. 
Per  Cent 

Proportion 
of  Employees, 
Chicago. 
Per  Cent 

Proportion 
of  Employees, 
Illinois. 
Per  Cent 

Under  6  months.  .  .  . 
Six  months  and 
under  one  year  .  .  . 
One  year  and  over.  . 

59.6 

14.1 
26.3 

34.7 

12.2 
53.1 

34.9 

7.4 
57.7 

100.0 

100.0 

100.0 

•  U.  S.  Bureau  of  Mines,  Miners'  Circular  No.  22,  p.  9. 
7  Report  of  the  Illinois  Industrial  Survey,  Hours  and  Health  of 
Women  Workers,  1918,  p.  102. 


Human  Waste  in  Industry  195 

It  will  be  noticed  from  these  figures  that  employees 
of  less  than  six  months'  experience,  representing  not  more 
than  35  per  cent  of  the  working  population  in  Illinois, 
accounted  for  60  per  cent  of  the  total  number  of  industrial 
accidents  that  occurred  in  88  firms.  In  another  study 
of  workers'  length  of  service  as  a  causative  factor  in 
accidents,  it  was  found  that  of  1,000  women  workers  in- 
jured 18  per  cent  had  been  with  their  employers  less 
than  a  month;  about  50  per  cent,  less  than  six  months; 
and  approximately  63  per  cent,  less  than  one  year.8  Not 
infrequently  industrial  workers  take  risks  and  expose 
themselves  to  dangers  in  a  spirit  of  braggadocio.  Es- 
pecially is  this  true  of  southern  and  eastern  Europeans 
who,  unaccustomed  to  the  hazards  of  industrial  life,  as- 
sume many  unnecessary  risks.  There  is  a  growing  recog- 
nition of  the  influence  of  fatigue  and  speed  of  production 
upon  accident  frequency.  The  testimony  of  the  British 
Health  of  Munition  Workers'  Committee  was  to  the  effect 
that  "speed  of  production  is  an  extremely  important 
factor  in  their  [accidents]  causation,  and  often  the  most 
important  factor  of  all,  so  any  improvement  of  factory 
conditions  which  increases  speed  of  production  inevitably 
tends  to  a  more  than  proportional  increase  of  accidents." 
The  same  conclusion  was  reached  regarding  the  influence 
of  excessive  fatigue.  Muscular  inaccuracy  inevitably  in- 
creases as  fatigue,  or  exhaustion  of  energy-yielding  ma- 
terial in  the  muscles,  takes  place. 

The  Cost  Involved. — The  direct  and  indirect  cost  of 
accidents  cannot  be  expressed  in  monetary  values,  nor 
can  it  be  measured  even  approximately  in  any  quantita- 
tive terms.  The  sacrifice  and  the  suffering  experienced 
by  the  workers  and  their  families  as  a  result  of  the  more 
than  twenty  thousand  fatal  and  seven  hundred  thousand 
nonfatal  accidents  in  American  industry  every  year  are 
beyond  comprehension.  The  social  and  economic  waste 
is  enormous.  In  the  United  States  in  1919,  the  loss  in 
production  on  account  of  industrial  accidents  was  es- 
timated to  be  296,000,000  work-days  and  approximately 

•Monthly  Labor  Review,  February,  1921,  p.  149. 


196  Human  Waste  in  Industry 

$853,000,000  in  wages.  The  total  direct  cost  of  industrial 
accidents,  including  medical  aid  and  insurance  overhead, 
is  estimated  at  not  less  than  $1,016,000,000  annually. 
These  figures  do  not  take  into  account  the  expenses  in- 
curred by  injured  workingmen,  which  are  not  paid  by 
the  employer  or  insurance  company;  the  overhead  cost 
of  personal  accident  insurance  carried  by  the  workmen 
themselves;  the  cost  of  training  new  men  to  take  the 
place  of  those  who  are  injured ;  and  the  cost  of  the  activi- 
ties of  employment  and  welfare  departments  in  keeping 
track  of  the  injured  employees  and  their  families.  The 
addition  of  these  items  of  expense  would  probably  in- 
crease the  total  to  a  figure  far  in  excess  of  a  billion  dollars 
a  year.  Moreover,  the  sum  would  be  greater  still  if 
cognizance  were  taken  of  the  direct  and  indirect  losses 
in  production  resulting  from  the  slowing  up  or  the  stop- 
page of  work  when  accidents  occur.9 

A  mere  glance  at  the  experience  of  a  few  states  with 
workmen's  compensation  suggests  the  financial  burden 
of  industrial  accidents.  More  than  11,000,000  working- 
days  were  lost  as  a  result  of  compensable  accidents  during 
the  last  five  years  in  Wisconsin,  and  more  than  $10,000,000 
were  paid  out  in  compensation  and  medical  aid.  In  Penn- 
sylvania in  1919,  the  total  wage  loss  resulting  from  indus- 
trial accidents  was  almost  $9,000,000,  and  the  number  of 
work-days  lost  was  over  2,000,000.  Even  at  the  present 
inadequate  rates  of  compensation,  which  in  most  states 
do  not  exceed  50  per  cent  of  the  wage  loss,  a  total  of 
$200,000,000  a  year  is  paid  out  in  compensation  for  acci- 
dents by  the  employers  of  the  United  States.10 

Such  statistics  as  these  do  not  measure  the  economic 
and  social  losses  that  result  from  the  temporary  and 
permanent  destruction  of  earning  power  of  the  wage- 
earning  class  and  of  the  nation.  The  total  annual  financial 
Joss  would  run  into  many  more  hundreds  of  millions  of 
dollars.  "Considered  from  this  point  of  view  the  accident 

*  Monthly  Labor  Review,  September,  1921,  pp.   12,  13. 

10  Willard  C.  Fisher,  ' '  American  Experience  with  Workmen 's  Com- 
pensation,"  The  American  Economic  Eeview,  Vol.  X,  No.  1,  March, 
1920,  p.  25. 


Human  Waste  in  Industry  197 

problem  assumes  serious  and  far-reaching  social  and 
economic  importance  in  that  on  the  one  hand  the  loss 
of  life  constitutes  a  serious  curtailment  of  the  nation's 
productive  efficiency,  while  on  the  other  a  heavy  and  costly 
economic  burden  results  from  the  required  support  of 
those  who,  deprived  of  the  earnings  of  the  breadwinner, 
become  a  public  charge. "" 

Occupational  Diseases. — Industrial  diseases  have  been 
defined  as  "morbid  results  of  occupational  activity  trace- 
able to  specific  causes  of  labor  conditions,  and  followed 
by  more  or  less  extended  incapacity  for  work. ' ' 12  The 
problem  of  occupational  disease  is  no  less  serious  than 
that  of  industrial  accidents.  Indeed,  industrial  diseases 
are  likely  to  prove  the  more  serious,  since  such  diseases 
are  not  easily  detected.  The  social  importance  of  this 
problem  is  found  in  the  relation  of  occupational  diseases 
to  industrial  efficiency.  Physical  strength  and  vigor  are 
the  basis  of  productivity,  and  anything  which  impairs 
the  health  and  vitality  of  the  nation's  wage-earners 
inevitably  results  in  a  diminution  in  national  efficiency. 

Occupational  hazards  to  health  comprise  extremes  of 
temperature  and  humidity;  excessive  strain  of  work;  im- 
proper or  inadequate  lighting  facilities;  impure,  com- 
pressed, or  rarefied  atmosphere ;  dangerous  bacteria ;  and 
dangerous  gases,  acids,  and  dusts.  Excessive  hours  of 
employment,  especially  during  the  night,  tend  to  produce 
fatigue,  irritation,  and  sickness.  Excessive  muscular 
strain,  such  as  the  lifting  of  heavy  weights  and  prolonged 
standing  may  result  in  rupture  or  varicose  veins.  When 
workers  toil  in  cramped  positions  healthy  action  of  the 
lungs  and  heart  is  impossible,  and  when  they  work  in 
ill-ventilated  factories  and  mines  disease  frequently  results 
and  the  workers'  health,  energy,  and  physical  capacity 
are  undermined.  Polluted  atmosphere  is  now  recognized 
as  one  of  the  main  causes  of  ill-health  in  industry.  Ex- 
tremes of  temperature  or  humidity  may  be  as  detrimental 

"Dr.  Frederick  L.  Hoffman,  Bulletin  No.  157,  U.  8.  Bureau  of 
Labor  Statistics,  March,  1915,  p.  17. 

""Memorial  on  Occupational  Disease*,"  American  Labor  Lcgitla- 
tion  EC  view,  Vol.  I,  January,  1911,  pp.  125,  126. 


198  Human  Waste  in  Industry 

as  poor  ventilation.  The  air,  even  if  fresh,  may  be  too 
hot  or  too  cold,  too  humid  or  too  dry,  thus  conducing 
to  bodily  discomfort  and  inefficient  work. 

Another  important  consideration  is  that  of  lighting. 
Imperfect  or  inadequate  lighting  has  been  found  to  be 
a  factor  of  great  significance  in  producing  eyestrain,  head- 
aches, and  inaccuracy.  Moreover,  employment  in  indus- 
tries in  which  gases,  vapors,  poisons,  and  other  irritating 
substances  are  present  constantly,  leads  to  direct  poison- 
ing of  the  workers.  Dust  produced  in  certain  industries, 
without  effective  safeguards,  may  result  in  lung  dis- 
eases. Dust  as  a  cause  of  occupational  disease  is  receiving 
increasing  recognition.  Constant  irritation  by  dust  par- 
ticles inflames  the  lungs  and  weakens  their  power  of 
resistance  to  the  harmful  bacteria  which  produce  diseases 
of  these  organs.  Finally,  the  manufacture  and  use  of 
high  explosives  involve  the  handling  of  poisonous  sub- 
stances and  thus  constitute  a  continuous  risk  to  the  em- 
ployees.13 

As  in  the  case  of  industrial  accidents,  certain  trades 
or  occupations  are  distinctly  more  unfavorable  to  health 
and  longevity  than  others.  Studies  of  mortality  and  mor- 
bidity indicate  an  intimate  connection  between  illness  and 
death  on  the  one  hand,  and  occupation  on  the  other. 
Tuberculosis  of  the  lungs  has  been  found  the  most 
prevalent  cause  of  death  for  all  occupations  combined, 
and  the  inhalation  of  metallic  dust  is  regarded  as  the  most 
serious  health  hazard  in  the  causation  of  pulmonary  tuber- 
culosis and  other  respiratory  diseases.  The  close  relation 
between  the  use  of  lead  in  certain  industries  and  the 
high  proportion  of  mortality  from  lead  poisoning  is 
generally  recognized.  Lead  poisoning  is  common  in  the 
printing  trades,  where  the  air  is  contaminated  with  lead 
dust.  Lead  and  arsenic  poisoning  in  the  manufacture 
of  paint  is  a  common  cause  of  serious  illness.  Metal  min- 
ing, where  the  mines  are  extremely  difficult  to  drain  and 

MU.  S.  Bureau  of  Labor  Statistics,  Bulletin  No.  221,  p.  62.  Ee- 
print  of  Memoranda  of  British  Health  of  Munition  Workers'  Com- 
mittee. 


Human  Waste  in  Industry  199 

ventilate  and  where  the  dusts  are  composed  of  sharp, 
angular  particles,  often  of  a  poisonous  nature,  exposes 
the  miner's  health  and  life  to  great  dangers.  In  coal 
mining  similar  hazards  obtain,  especially  from  poisonous 
gases. 

In  the  manufacture  of  pottery  various  groups  of  work- 
ers are  exposed  to  insidious  dangers  to  health.  Mortality 
statistics  of  English  potters  reveal  a  startling  death  rate 
in  this  industry.  Between  the  ages  of  twenty  and  thirty- 
five  years  the  mortality  of  potters  is  lower  than  that  of 
occupied  and  retired  males  generally,  but  for  the  ages 
forty-five  to  fifty-five  the  death  rate  of  potters  shows  an 
excess  of  about  74  per  cent,  while  between  the  ages  of 
fifty-five  and  sixty-five  the  excess  is  66  per  cent.14  Respira- 
tory diseases  are  most  prevalent  among  potters.  In  chem- 
ical industries  numerous  poisons  undermine  the  health  of 
the  workers.  It  has  been  found  that  where  lead  poisoning 
is  present,  deaths  frequently  result  from  cerebral  hemor- 
rhage, apoplexy,  and  paralysis.  Respiratory  diseases  are 
prominent  where  the  industrial  worker  is  exposed  to  colds, 
drafts,  and  dampness,  or  to  violent  changes  in  tempera- 
ture. Heavy  work  produces  organic  diseases  of  the  heart, 
and  tuberculosis  accounts  for  a  high  proportion  of  mor- 
tality where  mineral,  metallic,  or  vegetable  dusts  abound. 

The  industrial  hazards  to  health  in  the  case  of  dusts 
are  clearly  brought  out  by  Dr.  Frederick  L.  Hoffman.  By 
the  term  "dusts"  is  meant  all  the  fine  particles  of  material 
which  are  thrown  off  substances  in  the  process  of  manu- 
facture. They  include:  (1)  cutting  dusts,  sharp  crys- 
tallized particles  such  as  iron,  stone,  sand,  glass,  lime, 
and  pearl;  (2)  irritant  dusts,  derived  from  woods,  tex- 
tiles, hair,  and  clay;  (3)  inorganic  poisonous  dusts,  such 
as  the  chemical  dusts  arising  from  chemical  compounds 
used  in  coloring  and  for  the  preserving  of  furs ;  (4)  soluble 
saline  dusts,  derived  from  soluble  crystalline  substances 
used  in  dyeing;  (5)  organic  poisonous  dusts,  such  as  those 
thrown  off  during  the  manufacture  of  cigars;  and  (6) 
obstructive  and  irritating  dusts,  as  fine  particles  of  coal, 

M  U.  8.  Bureau  of  Labor  Statistics,  Bulletin  No.  231,  p.  251. 


200  Human  Waste  in  Industry 

the  dust  of  rouge  and  of  flour.  These  dusts  have  varied 
effects  with  regard  to  the  specific  injuries  which  they 
produce,  but  the  primary  danger  lies  in  the  fact  that  the 
dust  particles  lodge  in  the  air  passages  and  in  the  lungs 
and  gradually  induce  some  chronic  disease  of  these 
organs.15 

Responsibility  of  Employers  and  Employees  in  Occupa- 
tional Diseases. — Although  employers  appreciate  more 
than  ever  before  that  the  safety,  skill,  and  contentment 
of  their  workers  is  as  important  a  business  requirement 
as  the  quality  of  the  commodities  they  produce,  and  al- 
though wage-earners  are  better  educated  than  ever  as  to 
the  health  risks  in  industry,  both  of  these  groups  are  still 
responsible  in  part  for  the  prevalence  of  human  waste 
from  occupational  diseases.  A  very  large  proportion  of 
the  industrial  establishments  in  this  country  are  deficient 
in  protective  measures  against  occupational  hazards  to 
health.  In  our  cotton  mills  and  factories  ventilation  is 
frequently  very  poor  and  sanitary  conditions  deplorable. 
For  example,  the  New  York  City  Department  of  Health, 
through  its  factory  inspectors,  examined  484  factories  and 
shops  which  employed  36,978  men  and  37,889  women  and 
discovered  numerous  conditions  that  conduced  to  ill- 
health  'of  the  workers.  The  department  found  harmful 
dusts  in  173  establishments,  dangerous  fumes  in  84,  ex- 
cessive humidity  in  29,  safety  hazards  in  64,  defective 
lighting  in  117,  defective  ventilation  in  89,  dirty  work- 
rooms in  171,  common  drinking  cups  in  121,  common 
towels  in  104,  defective  plumbing  in  60,  inadequate  or 
insanitary  washing  facilities  in  77,  inadequate  or  insani- 
tary toilets  in  165,  lack  of  lockers  in  66,  lack  of  first-aid 
equipment  in  29,  and  improper  or  inadequate  seats  in 
188.  Many  deficiencies  were  corrected  through  persuasion 
and  special  personal  effort  of  the  inspectors,  while  some 
cases  were  submitted  to  the  sanitary  bureau  for  correction 
by  legal  action.16 

15  See  Mortality  from  Respiratory  Diseases  in  Dusty  Trades,  U.  S. 
Bureau  of  Labor  Statistics,  Bulletin  No.  231,  1918. 
u  Monthly  Labor  Beview,  September,  1919,  p.  300. 


Human  Waste  in  Industry  201 

Employees  are  often  responsible  for  contraction  of 
occupational  disease,  because  of  the  failure  to  make  use 
of  protective  devices  or  because  of  their  ignorance  of  the 
health  hazards  inherent  in  certain  industries.  This  phase 
of  the  problem  has  been  accentuated  by  the  influx  to 
American  industries  of  southern  and  eastern  Europeans 
who  are  unfamiliar  with  the  methods  and  processes  of 
modern  industry  and  unable  to  read  warnings  against 
imminent  danger,  even  when  printed  in  their  own 
language.  It  should  not  be  implied  that  all  occupational 
diseases  are  under  the  control  of  employers  and  employees, 
since  no  matter  how  much  care  and  intelligence  may  be 
exercised  there  is  an  irreducible  minimum  of  occupational 
disease  incident  to  modern  industry. 

The  Social  and  Economic  Waste. — As  in  the  case  of 
industrial  accidents,  accurate  statistics  concerning  the 
social  and  economic  cost  of  occupational  disease  are  not 
available.  Here  again  one  must  rely  upon  estimates  that 
have  been  generally  accepted  as  authoritative,  remember- 
ing that  the  total  volume  of  waste  involved  in  industrial 
diseases  cannot  be  measured  in  financial  terms.  In  his 
"National  Vitality:  Its  Wastes  and  Conservation,"  pre- 
pared for  the  National  Conservation  Commission,  Pro- 
fessor Irving  Fisher  estimated  that  the  average  number  of 
persons  who  are  sick  in  the  United  States  is  about 
3,000,000,  and  that  very  close  to  one-third  of  these  are 
in  the  working  period  of  life.  The  loss  of  earnings  to 
the  workers  in  this  group  would  be,  at  a  minimum,  $500,- 
000,000,  according  to  Professor  Fisher's  calculation.  The 
total  costs  of -illness,  including  loss  of  wages  and  medical 
attention  aggregates  not  less  than  $960,000,000  a  year. 
Professor  Fisher  concludes  that  the  actual  economic  sav- 
ing possible  annually  in  the  United  States  through  the 
prevention  of  needless  deaths,  illness,  and  fatigue  far 
exceeds  one  and  a  half  billions,  and  may  be  several  times 
as  great.17  Dr.  George  M.  Gould  estimated  that  sickness 
and  death  in  the  United  States  cost  $3,000,000,000 

"  Irving  Fiahqr,  National  Vitality;  It*  Watte*  and  Conservation, 
pp.  741,  742. 


202  Human  Waste  in  Industry 

annually,  of  which  at  least  a  third  is  regarded  as  pre- 
ventable.18 It  is  estimated  by  Professor  Pusher  that  the 
total  loss  of  direct  earnings  and  potential  earnings  on 
account  of  death,  together  with  the  expenses  of  illness 
resulting  from  tuberculosis,  exceeds  one  billion  dollars 
a  year. 

Mortality  from  tuberculosis  has  declined  from  an  aver- 
age of  200  per  100,000  population  to  about  120  per  100,000. 
This  decline  in  the  death  rate,  however,  appears  to  have 
affected  very  slightly  American  workers  in  the  so-called 
dusty  trades.  It  has  been  conservatively  estimated  that 
of  the  42,000,000  gainfully  employed  persons  in  the  United 
States  4,000,000,  or  approximately  10  per  cent  of  the 
total,  work  under  conditions  more  or  less  detrimental  to 
health  and  life  on  account  of  atmospheric  impurities  that 
produce  tuberculous  and  non-tuberculous  respiratory  dis- 
eases.19 One  million  Americans  have  tuberculosis,  and 
about  70  per  cent  of  these  individuals  are  between  the 
ages  of  fifteen  and  forty-five  —  the  age  of  wage-earners 
and  producers.  It  has  been  found  that  somebody  dies 
every  four  minutes  from  tuberculosis,  fifteen  die  every 
hour,  and  three  hundred  sixty-two  every  day.  Two-thirds 
of  these  deaths  are  among  wage-earning  classes. 

The  42,000,000  men  and  women  who  are  engaged  in 
gainful  occupations  in  the  United  States  are  said  to  lose 
on  an  average  eight  and  one-half  days  annually  from 
illness  disability,  a  total  of  350,000,000  work-days.  The 
economic  waste  from  preventable  disease  and  death  among 
these  persons  is  estimated  at  $1,800,000,000.  Experience 
has  shown  conclusively  that  this  loss  could  be  materially 
reduced,  saving  to  the  workers  alone  a  sum  in  excess  of 
$1,000,000,000  a  year.  No  nation  can  look  with  com- 
placency upon  the  destruction  of  health  and  life  which 
results  from  industrial  processes.  It  is  difficult  to  con- 
ceive the  wisdom  of  industrial  progress  purchased  at  such 
a  price. 

"  Quoted  in  Fisher,  ibid. 

19  Frederick  L.  Hoffman,  Mortality  and  Respiratory  Diseases  in 
Dusty  Trades,  U.  8.  Bureau  of  Labor  Statistics,  Bulletin  No.  231, 
pp.  11,  12. 


Human  Waste  in  Industry  203 

Industrial  Fatigue. — The  economic  and  social  impor- 
tance of  industrial  fatigue  has  only  recently  received 
serious  attention  in  the  United  States  and  the  United 
Kingdom.  As  has  been  the  case  in  many  other  aspects 
of  industrial  problems,  the  Great  War  aroused  public  in- 
terest in  this  problem.  Fatigue  has  been  defined  as  "the 
sum  total  of  the  results  of  activities  which  show  them- 
selves in  a  diminished  capacity  for  doing  work." 
"Fatigue  is  the  after-effect  of  work;  it  is  the  condition 
of  the  worker's  organism  after  he  has  expended  energy 
in  doing  something.  It  is  a  necessary  by-product  of  ac- 
tivity. ' ' 20  Industrial  fatigue  means  a  decrease  in  pro- 
ductive power  and  efficiency  resulting  from  prolonged  and 
intense  activity  in  some  occupation.  Physiologically 
speaking,  fatigue  is  the  failure  of  the  structures  of  the 
body  to  perform  their  proper  functions  because  of 
physical  and  chemical  changes  that  have  taken  place 
within  those  structures.  This  failure  to  function  is  caused 
by  the  accumulation  of  poisonous  waste  in  the  human 
organism  which  prevents  the  creation  of  sufficient  energy 
to  maintain  normal  productive  capacity. 

The  manifestations  of  fatigue  are  unmistakable.  When 
a  condition  of  fatigue  sets  in,  even  though  the  worker 
is  not  conscious  of  any  pain  or  weariness,  work  is  done 
in  a  more  disorderly,  inaccurate,  and  inefficient  manner, 
resulting  in  decreased  output.  The  true  sign  of  fatigue, 
therefore,  is  a  diminution  in  productivity  which  is  revealed 
objectively  by  a  reduction  of  output  even  before  it  is 
recognized  subjectively  by  the  worker.  "The  results  of 
persistent  fatigue  are  shown  in  reduced  physical  capacity 
and  a  loss  of  resistance  to  disease  or  an  unsatisfactory 
environment,  which  are  further  reflected  in  returns  of 
sickness  or  broken  time  and  of  the  number  of  accidents 
recorded."*1 

The  causes  of  fatigue  are  many.  They  consist  of  condi- 
tions which,  though  common,  are  frequently  unrecognized 

"Frank  B.  Oilbreth  and  Lillian  M.  Oilbreth,  Fatigue  Study,  p.  4. 
"British  War  Cabinet  Committee,  Report  on  Women  in  Industry, 
1919,  p.  222. 


204  Human  Waste  in  Industry 

in  modern  industrial  activities.  Industrial  fatigue  may 
result  from:  (1)  concentration  of  intelligence,  observa- 
tion, and  attention  upon  some  particular  task ;  (2)  varied 
distribution  of  attention  and  wide  responsibility  neces- 
sitated by  attendance  on  several  machines;  (3)  sus- 
tained use  of  special  senses  and  sense  organs  in  discrimina- 
tion, especially  in  occupations  requiring  a  high  degree 
of  skill  and  accuracy ;  (4)  continuous  employment  at  some 
task  which,  though  it  may  be  performed  automatically, 
results  in  excessive  monotony;  (5)  prolonged  standing 
and  the  lifting  of  heavy  weights,  especially  in  the  case 
of  women;  (6)  excessive  hours  of  labor;  (7)  undesirable 
and  insanitary  working  conditions;  (8)  the  tendency  to 
speed  up  workers  beyond  normal  capacity;  (9)  under- 
nutrition  and  malnutrition,  caused  either  by  insufficient 
wages  or  by  ignorance  of  proper  dietary  requirements; 
(10)  bad  housing  conditions;  (11)  inadequate  or  improper 
lighting  which  causes  strain  to  the  eyes;  (12)  impure 
or  rarefied  atmosphere  and  extremes  of  temperature ;  and, 
finally,  (13)  awkward  positions  necessitated  by  certain 
employments.  The  British  War  Cabinet  Committee  on 
"Women  in  Industry  concluded  that  "fatigue  naturally 
occurs  earlier  in  underpaid,  underfed  persons;  and  the 
secondary  results  of  overstrain,  including  sickness,  are 
most  common  and  excessive  among  this  class  of  workers, 
which  is  mainly  comprised  of  women  and  girls." 

The  costs  of  fatigue  are  expressed  in  terms  of  its  effect 
upon  health,  longevity,  safety,  the  supply  of  labor,  the 
stability  of  employment,  industrial  good-will  and  content- 
ment, productive  efficiency — including  alertness,  speed, 
accurate  work,  minimum  waste  of  materials — as  well  as 
output  and  profits.  A  recent  writer  has  estimated  that 
there  is  a  loss  resulting  from  fatigue  that  amounts  to 
twenty  cents  per  day  per  year  for  each  employee,  which 
in  the  aggregate  would  mean  a  total  loss  to  the  nation 
for  the  42,000,000  gainfully  employed  workers  in  the 
United  States  of  approximately  two  and  one-half  billion 
dollars  annually.22  While  this  is  purely  an  estimate,  it 

12  See  ' '  Shop  Standards  and  Fatigue, ' '  by  Dr.  Bernard  J.  Newman, 
National  Safety  News,  November  29,  1920. 


Human  Waste  in  Industry  205 

is  recognized  as  reasonable  and  logical  by  those  in  contact 
with  this  important  problem  in  industry.  Professor 
Fisher,  in  his  work  to  which  reference  has  been  made 
already,  states  that  "the  economic  waste  from  undue 
fatigue  is  probably  much  greater  than  the  waste  from 
serious  illness." 

Fatigue  as  a  Factor  in  Industrial  Accidents. — Although 
the  problem  of  industrial  fatigue  is  essentially  one  of 
fatigue  in  the  nervous  system  and  its  effects  on  general 
efficiency,  there  is  still  another  important  phase  of  the 
problem  to  which  consideration  must  be  given;  namely, 
the  relation  of  fatigue  to  industrial  accidents.  That 
fatigue,  which  is  the  expression  of  a  poisoned  organism, 
inevitably  results  in  reduced  resistance  to  disease  is  not 
difficult  to  understand.  Fatigue  as  a  causal  factor  in 
industrial  accidents  may  not  be  so  apparent.  In  recent 
decades,  however,  evidence  that  such  a  relationship  ob- 
tains has  been  accumulating.  Both  in  Europe  and  in  the 
United  States  official  investigations  have  proved  that  acci- 
dents tend  to  increase  progressively  with  the  hours  of 
labor  during  the  morning,  to  decrease  in  the  hours  im- 
mediately following  the  noon  period,  and  to  increase  again 
toward  the  latter  part  of  the  afternoon.  A  study  of 
industrial  accidents  in  Great  Britain  showed  that  during 
the  forenoon  the  number  of  accidents  increased  with  out- 
put, both  accidents  and  production  reaching  a  maximum 
in  the  last  or  next  to  the  last  full  hour  of  work. 

Similar  conclusions  have  been  reached  in  other  coun- 
tries, including  the  United  States.  In  the  state  of  Illinois, 
for  example,  a  recent  industrial  survey  of  1,560  accidents 
in  a  Chicago  packing  plant,  403  accidents  in  a  knitting 
mill,  and  391  accidents  in  88  other  Illinois  firms  showed 
that:  (1)  The  accident  rate  in  every  instance  studied 
varied  with  the  rate  of  production,  being  highest  when 
production  was  highest  and  lowest  during  the  hours  of 
lessened  production;  (2)  the  length  of  employment  bore 
an  inverse  ratio  to  the  number  of  accidents;  and  (3)  the 
two  factors  most  responsible  for  accidents  were  speed 
of  production  and  length  of  employment.  Fatigue  was 


206  Human  Waste  in  Industry 

recognized  as  having  a  direct  bearing  upon  the  increase 
of  accidents  in  a  given  long-hour  day.  The  accident  rate 
in  most  cases  was  heaviest  in  the  third,  fourth,  and  fifth 
hours  of  the  working  period,  both  in  the  morning  and  in 
the  afternoon.  Increasing  speed  of  production,  the 
accumulation  of  fatigue,  and  anticipation  of  pleasures  to 
follow  the  day's  work  have  been  responsible  factors  in 
increasing  accidents  toward  the  end  of  the  working-day.23 
Wage-Earners  and  the  Financial  Burden  of  Accidents. 
— It  is  an  indisputable  fact  that  the  average  wage-earner 
is  financially  unable  to  bear  the  burdens  imposed  upon 
him  by  accidents  and  illness  resulting  from  industrial 
employment.  Before  the  meeting  of  the  American  Public 
Health  Association  in  1919,  a  special  investigator  for  the 
United  States  Bureau  of  Labor  Statistics,  in  a  paper  cover- 
ing the  budgets  of  approximately  13,000  families  through- 
out the  United  States  during  1918-1919,  showed  that  20 
per  cent  of  the  families  included  in  the  study  did  not 
have  sufficient  food  for  the  maintenance  of  health,  30  per 
cent  were  on  the  border  line  between  sufficient  and  insuffi- 
cient nourishment,  leaving  about  50  per  cent  adequately 
nourished.  Clothing  expenditures  were  insufficient  to 
maintain  families  in  health  and  decency.  Fifty  per  cent 
of  the  families  included  in  a  special  study  were  found 
living  in  houses  which  had  less  than  one  room  per  person, 
and  many  miscellaneous  expenses  for  the  care  of  health, 
education,  amusement,  etc.,  were  inadequate.24  In  another 
investigation  covering  accidents  among  1,000  women,  it 
was  found  that  nearly  90  per  cent  of  the  women  who 
were  injured  were  receiving  less  than  $15  a  week;  less 
than  1  per  cent  were  receiving  $25  or  more  weekly,  and 
over  one-half  received  less  than  $10  a  week.25  In  the 
state  of  California  the  average  age  of  persons  killed  in 
industry  in  1919  was  34  years,  and  the  average  wage  was 
$28.51  a  week,  as  compared  with  an  average  of  39.9  years 
and  $25.01  a  week  for  1918.26 

28  See  Eeport  of  the  Illinois  Industrial  Survey,  Hours  and  Health 
of  Women  Workers,  Chap.  VIII. 

24  Monthly  Labor  Review,  December,  1919,  pp.  312,  313. 

28  Ibid.,  February,  1921,  p.  149. 

29  Ibid.,  January,  1921,  p.  177. 


Human  Waste  in  Industry  207 

These  figures,  it  should  be  noted,  are  for  a  period  of 
unprecedented  prosperity,  when  the  wages  of  labor  were 
generally  thought  to  be  excessive.  The  evidence  for  every 
country  shows  that  the  wages  of  labor  are  generally  in- 
sufficient to  provide  a  surplus  for  emergencies  resulting 
from  industrial  accidents,  occupational  disease,  and 
fatigue,  so  that  the  worker  cannot  be  expected  to  bear 
the  financial  responsibility  incident  to  these  misfortunes. 
It  is  for  this  reason  that  an  adequate  system  of  work- 
men's compensation  and  other  forms  of  social  insurance 
are  being  introduced  in  progressive  industrial  countries. 

Conclusions. — The  capital  of  the  wage-earner  is  his 
capacity  to  work,  and  impairment  of  this  capacity 
threatens  his  very  existence.  His  continued  capacity  to 
toil  is  all  that  stands  between  him  and  the  alternatives 
of  charity  and  starvation.  The  husbanding  of  the  physical 
resources  of  the  worker,  therefore,  is  a  national  duty  of 
first  importance.  Where  there  is  no  health  there  is  no 
energy,  and  where  there  is  no  energy  there  is  no  output. 
This  suggests  the  material  gains  that  result  from  a  proper 
appreciation  of  the  purposes  and  limitations  of  human 
labor  and  the  importance  of  proper  nutrition,  adequate 
rest,  and  sufficient  protection  of  limb  and  life  in  industry. 
The  reduction  of  accidents  and  occupational  diseases  to 
a  minimum  is  a  task  that  must  devolve  equally  upon 
employers,  employees,  and  society.  This  calls  for  intelli- 
gent observation  of  output,  regular  investigation  of  the 
causes  of  sickness  and  lost  time,  prompt  adaptation  of 
hours  and  conditions  of  labor  to  physiological  needs, 
regular  physical  examination  of  employees,  provision  of 
adequate  facilities  for  resting,  and  the  introduction  of 
many  other  precautions  conducive  to  the  conservation  of 
health  and  energy.  The  plant  must  be  clean  and  whole- 
some, properly  heated  and  ventilated,  and  equipped  with 
sanitary  accommodations.  Care  must  be  exercised  in  safe- 
guarding dangerous  machinery  and  injurious  processes. 
In  short,  there  must  be  the  application  of  physiological 
and  psychological  science  to  the  details  of  industrial  man- 
agement, aided  by  a  campaign  of  education  that  will 


208  Human  Waste  in  Industry 

teach  men  and  women  the  folly  of  taking  unnecessary 
industrial  risks. 


SELECTED  REFERENCES 

AMERICAN  LABOR  LEGISLATION  REVIEW,  1:125-143,  Jan.,  1911. 
COMMONS,  J.  R.,  AND  ANDREWS,  J.  B.,  Principles  of  Labor  Legis- 
lation, revised  edition,  1920,  Chap.  VII. 
FIJHER,  IRVING,  National  Vitality:  Its  Wastes  and  Conservation, 

1910. 
GILBRETH,  F.  B.,  AND   GiLBRETH,  LILLIAN  M.,  Fatigue  Study, 

1916,  Chaps.  I  and  II. 
GOLDMARK,  JOSEPHINE,  Fatigue  and  Efficiency,  1912,  Chaps.  II 

and  III. 
HOFFMAN,  F.  L.,  Industrial  Accident  Statistics f  U.   S.  Bureau 

of  Labor  Statistics,  Bulletin  157,  1915. 
HOFFMAN,  F.  L.,  Mortality  from  Respiratory  Diseases  in  Dusty 

Trades,  U.  S.  Bureau  of  Labor  Statistics,  Bulletin  231,  1918. 
JONES,  E.  D.,  The  Administration  of  Industrial  Enterprises,  1916, 

pp.  212-225. 

KING,  W.  L.  M.,  Industry  and  Humanity,  1918,  Chap.  IX. 
LAUCK,  W.  J.,  AND  SYDENSTRICKER,  EDGAR,  Conditions  of  Labor 

in  American  Industries,  1917,  Chaps.  V  and  VIII. 
LINK,  H.  C.,  A  Practical  Study  in  Industrial  Fatigue,  Journal  of 

Industrial  Hygiene,  1 :233-237,  Sept.,  1919. 
MUNSTERBERG,  HUGO,  Psychology  and  Industrial  Efficiency,  1913, 

pp.  206-220. 

RUBINOW,  I.  M.,  Social  Insurance,  1913,  Chaps.  IV  and  V. 
SEAGER,  H.  R.,  Social  Insurance,  1910,  Chaps.  I-III. 
THOMPSON,  W.  G.,  The  Occupational  Diseases,  1914. 
UNITED  STATES  BUREAU  OF  LABOR  STATISTICS,  Bulletin  207,  1917 ; 

Bulletin  249,  1919. 


CHAPTER  XI 
UNEMPLOYMENT 

The  Nature  of  Unemployment. — Regularity  of  employ- 
ment is  something  that  every  normal  individual  desires, 
and  yet  reasonable  security  of  employment  has  not  been 
assured  the  workers  under  modern  competitive  indus- 
trialism. The  break-up  of  the  manorial  system  in  Eng- 
land, the  passing  of  free  land  in  America,  and  the 
subsequent  development  of  city  industries  deprived  the 
population  of  the  continuity  of  employment  which  had 
existed  in  the  simple  stage  of  agricultural  economy.  The 
complexity  of  modern  industrial  life,  the  minute  sub- 
division of  labor,  and  world  markets  have  made  it  prac- 
tically impossible  to  gauge  the  demand  for  commodities, 
with  the  result  that  production  is  not  adjusted  readily 
to  consumption  and  periodical  unemployment  occurs.  The 
frequency  with  which  acute  unemployment  has  occurred, 
and  the  increasing  number  of  individuals  who  have  be- 
come victims  of  seasonal  fluctuations  in  employment,  have 
given  unemployment  a  place  among  the  major  problems 
of  our  industrial  system.  No  more  serious  problem 
challenges  the  genius  of  modern  nations  than  that  of 
stabilizing  the  opportunity  to  work. 

The  term  "unemployment"  when  used  in  a  comprehen- 
sive sense  refers  to  all  forms  of  occupational  idleness, 
no  matter  what  the  cause,  whether  within  or  beyond  the 
control  of  the  unemployed  worker.  Thus  interpreted,  un- 
employment is  the  failure  to  make  a  labor  contract  or 
to  continue  such  a  contract  when  it  has  been  negotiated ; 
it  involves  the  stoppage  of  work  coupled  with  the  diffi- 
culty of  finding  employment  elsewhere.  The  failure  to 
make  a  labor  contract  may  result  from  unwillingness  to 
work  on  the  part  of  those  who  are  able ;  physical  or  mental 

209 


£  1 0  Unemployment 

disability  of  those  persons  who  would  otherwise  be  will- 
ing to  labor ;  and  the  impossibility  of  finding  employment 
even  when  individuals  are  willing  to  work.  These  varied 
conditions  make  it  necessary  to  distinguish  the  three  main 
types  of  idleness;  namely,  irregular  employment,  under- 
employment, and  unemployment.  Irregular  employment 
occurs  when  a  worker,  because  of  the  variable  demand 
for  his  labor  or  his  own  tendency  to  idleness,  loses  a 
great  deal  of  time.  Many  persons  are  idle  because  they 
are  lazy  or  suffer  from  vicious  habits.  Underemployment 
exists  when  a  laborer  is  unable  to  secure  enough  work 
to  provide  a  bark  minimum  of  subsistence  and  must  rely 
upon  charitable  agencies  to  supplement  his  income.  Pro- 
fessor Lescohier  estimates  that  probably  more  than  half 
of  our  wage-earners  suffer  from  underemployment.  Under- 
employment breeds  economic  inefficiency  and  moral  de- 
generacy, with  the  result  that  workers  in  this  group  are 
the  last  to  be  employed  in  periods  of  industrial  activity 
and  the  first  to  be  discharged  in  periods  of  business  de- 
pression. Unemployment  occurs  when  a  worker  is  capable 
and  willing  to  work  but  cannot  find  employment  because 
of  general  economic  conditions  or  maladjustment  within 
the  plant  or  industry. 

In  analyzing  the  problem  of  unemployment  it  is  neces- 
sary to  distinguish  between  the  unemployed  and  the  un- 
employable. Unemployability,  or  disability  developing 
from  illness,  old  age,  or  some  other  personal  condition, 
is  not  identical  with  the  problem  of  unemployment.  The 
former  is  essentially  a  social  problem,  while  the  latter  is 
a  problem  of  industry  because  its  determinants  arc 
anchored  deep  in  the  foundations  of  the  present  industrial 
system.  In  So  far  as  unemployability  is  the  result  of 
occupational  poisons,  overwork,  insanitary  and  unsafe 
conditions  of  labor  it  is  also  a  problem  of  industry,  since 
its  solution  to  a  large  extent  depends  upon  the  removal 
of  undesirable  industrial  conditions.  Moreover,  in  so  far 
as  low  wages  result  in  undernourishment  and  illness  and 
in  a  penurious  old  age,  industry  must  be  held  responsible 
for  the  problem  of  unemployability. 


Unemployment  211 

The  Social  and  Economic  Significance  of  the  Problem. — 
Reasonable  security  of  employment  is  a  fundamental  con- 
dition of  social  progress.  In  its  economic  aspects  unem- 
ployment reacts  adversely  upon  the  industrial  enterpriser 
and  the  business  man,  as  well  as  upon  the  wage-earners. 
For  industry  unemployment  means  increased  overhead  ex- 
penses caused  by  idle  equipment  and  idle  materials.  What- 
ever tends  to  curtail  the  buying  power  of  consumers 
inevitably  reduces  production  and  profits.  It  is  important 
to  remember  that  the  majority  of  consumers  are  wage- 
earners  and  their  dependents.  Prolonged  periods  of  un- 
employment and  seasonal  fluctuations  in  certain  industries 
reduce  the  purchasing  power  of  the  wage-earning  classes 
and  force  the  strictest  economy  in  consumption.  Con- 
sumers' demand  for  commodities  falls  off;  this  is  reflected 
in  reduced  orders  by  wholesalers  and  retailers,  so  that 
manufacturers  are  compelled  to  cut  down  the  working 
force.  Those  who  are  thus  discharged  recruit  the  army 
of  the  unemployed.  After  their  savings  are  exhausted 
the  buying  power  of  these  persons  is  destroyed  and  cur- 
tailed consumption  results  in  further  limitation  of  pro- 
duction. Thus  unemployment  produces  more  unemploy- 
ment, and  it  becomes  extremely  difficult  to  escape  from 
the  vicious  circle. 

Wage-earners  are  undoubtedly,  the  chief  sufferers  in 
periods  of  unemployment.  Business  recession  may  force 
many  employers  into  bankruptcy,  but  in  periods  of  pros- 
perity most  employers  are  able  to  build  up  a  reserve  fund 
to  meet  the  emergencies  incident  to  price  recession.  The 
earnings  of  the  average  wage-earner,  on  the  other  hand, 
are  not  adequate  to  provide  a  financial  reserve  against 
unemployment.  The  meager  savings  the  workers  are  able 
to  accumulate  are  soon  exhausted  when  their  source  of 
income  is  cut  off  or  only  part-time  work  can  be  had.  Loss 
of  opportunity  to  earn  a  living  is  accompanied  by  many 
specific  evils.  (1)  Deprived  of  the  income  of  the  chief 
wage-earner,  the  family  must  have  its  income  supple- 
mented by  the  earnings  of  the  mother  and  children  or 
by  payments  from  boarders  and  lodgers,  whose  presence 


212  Unemployment 

is  inimical  to  family  life.  Often  there  is  resort  to 
charitable  aid.  In  some  communities  it  has  been  found 
that  70  per  cent  of  the  applicants  for  charity  would  re- 
quire no  aid  if  work  were  regular  and  wages  proportionate 
to  services  performed.  (2)  The  existence  of  a  supply 
of  casual  laborers  and  irregularly  employed  women  and 
children  encourages  parasitic  industries  which  are  unable 
to  survive  unless  they  pay  wages  below  the  standard  of 
decent  subsistence.  Unemployment  thus  constitutes  an 
incentive  to  sweatshop  practices.  (3)  General  depression 
of  the  wage  level  is  an  inevitable  result  of  unemployment. 
Workers  released  from  industries  that  have  shut  down 
because  of  depression  swarm  into  those  industries  that 
manage  to  keep  operating,  with  the  consequence  that  the 
severity  of  competition  for  jobs  is  greatly  increased  and 
wage  standards  are  lowered.  The  maintenance  of  decent 
wage  scales  is  practically  impossible  under  such  conditions 
of  surplus  labor.  (4)  Unemployment  results  in  wasteful 
expenditure  among  wage-earners.  Irregularity  of  income 
has  a  demoralizing  influence  upon  the  habits  of  the 
workers.  When  periods  of  depression  end  and  prosperity 
again  assures  regular  earnings,  the  workers  who  have 
been  deprived  of  many  necessities  and  all  luxuries  tend 
to  spend  their  incomes  recklessly  in  their  eagerness  to 
enjoy  the  things  which  they  have  been  unable  to  buy. 
(5)  Unemployment  results  in  the  loss  of  economic  status, 
and  vast  numbers  of  workers  drift  into  the  tide  of  casual 
laborers.  With  income  cut  off  and  skill  going  to  waste, 
the  morale  of  workers  is  weakened  and  economic  de- 
generation is  the  result.  Irregularity  of  habits  is  the 
natural  by-product  of  irregular  employment.  Unemploy- 
ment creates  a  dislike  for  work  and  stimulates  the  desire 
to  drift.  (6)  Moral  delinquency  is  a  frequent  effect  of 
unemployment.  Discouragement  is  inevitable  when  men 
and  women  are  willing  to  work  but  cannot  find  employ- 
ment, and  may  result  in  moral  delinquency.  Criminality 
tends  to  increase  in  periods  of  industrial  depression  and 
unemployment.  Evidence  indicates  that  the  rate  of 
suicide  also  increases  at  such  times.  It  is  significant  that 


Unemployment  213 

in  1921,  when  unemployment  was  general,  there  were 
20,000  cases  of  suicide  in  the  United  States,  an  unpre- 
cedented waste  of  human  life  resulting  mainly  from  dis- 
turbed economic  conditions  and  the  aftermath  of  war. 

Unemployment  not  only  tends  to  dishearten  the  workers 
but  also  fills  them  with  resentment  against  the  present 
industrial  order.  Discontent  and  a  tendency  to  radicalism 
are  the  natural  consequences  of  unemployment.  Without 
reasonable  security  of  employment  the  great  mass  of 
wage-earners  cannot  be  expected  to  perform  the  duties 
of  citizenship.  Unemployment,  moreover,  is  probably  the 
greatest  single  factor  in  breeding  social  unrest.  Kevolu- 
tionary  philosophy  finds  fertile  soil  in  the  minds  of  those 
who  are  able  and  willing  to  work  but  who,  on  account 
of  conspicuous  weaknesses  in  our  economic  system,  are 
forced  to  accept  idleness  with  its  train  of  cumulative 
indebtedness,  want,  and  misery.  An  industrial  system 
that  fails  to  guarantee  regularity  of  employment  will  be 
indicted  by  the  masses  who  suffer  degeneration  of  the 
standard  of  life.  Professor  Lescohier  has  summarized 
the  effects  of  unemployment  in  a  very  pungent  paragraph : 
"Unsteady  employment  attacks  the  worker's  efficiency  in 
so  many  ways  that  probably  no  one  could  enumerate 
them  all.  It  undermines  his  physique,  deadens  his  mind, 
weakens  his  ambition,  destroys  his  capacity  for  continu- 
ous, sustained  endeavor;  induces  a  liking  for  idleness  and 
self-indulgence ;  saps  self-respect  and  the  sense  of  respon- 
sibility; impairs  technical  skill;  weakens  nerve  and  will 
power ;  creates  a  tendency  to  blame  others  for  his  failure ; 
saps  his  courage;  prevents  thrift  and  hope  of  family  ad- 
vancement; destroys  a  workman's  feeling  that  he  is  tak- 
ing good  care  of  his  family;  sends  him  to  work  worried 
and  underfed;  plunges  him  into  debt."1 

Demand  and  Supply  in  Relation  to  Unemployment. — 
Unemployment  arises  from  a  disturbance  of  the  equili- 
brium between  the  demand  for  labor  and  the  supply  of 
labor.  Such  an  equilibrium,  of  course,  does  not  ever  exist 
in  a  dynamic  society,  although  in  periods  of  normal  indus- 

'Don.  D.  Lescohier,  The  Labor  Market,  p.  107. 


214  Unemployment 

trial  activity  there  may  be  a  rough  approximation  to  it. 
A  country's  labor  supply  consists  of  that  part  of  the 
population  which  is  capable  of  entering  gainful  occupa- 
tions. If  recruitment  of  the  labor  supply  depended  solely; 
upon  an  excess  of  births  over  deaths  the  quantity  of 
labor-power  would  be  relatively  fixed,  but  immigration 
is  an  important  factor  in  augmenting  the  supply  of  labor 
in  such  countries  as  the  United  States.  The  demand  for 
labor  is  an  aggregate  of  hundreds  of  thousands,  if  not 
millions,  of  specific,  individual  demands  for  special  types 
of  labor-power,  to  be  used  in  particular  establishments 
for  a  more  or  less  definite  period  of  time.  Centralized 
control  of  these  numerous  demands  is  extremely  difficult. 
Industrial  integration  incident  to  an  era  of  trusts  and 
combines  tends  to  stabilize  the  demand  for  labor  because 
it  replaces  a  large  number  of  competing  demands  by 
relatively  few  demands.  Large  business  units  are  able  tp 
stabilize  production  because  they  can  measure  the  demand 
for  commodities  with  greater  facility  than  numerous  small 
enterprises  can.  Moreover,  large  concerns  are  able  to 
produce  a  variety  of  commodities  and  can  shift  their 
working  force  from  departments  with  slow  production  to 
active  departments. 

There  is  no  fine  adjustment  between  the  supply  of  labor 
and  the  demand  for  it.  The  world's  labor  supply  can  be 
increased  only  by  securing  an  excess  of  births  over  deaths 
or  by  improving  the  efficiency  of  the  existing  population. 
Conversely,  the  supply  can  be  decreased  only  by  an  excess 
of  deaths  over  births,  or  by  a  diminution  of  labor  effi- 
ciency. The  supply  of  commodities  can  be  adjusted  to 
effective  demand  with  a  fair  degree  of  facility.  When  a 
falling  off  in  the  demand  for  a  commodity  results  in  a 
lower  price,  production  is  shifted  to  other  commodities 
for  which  the  demand  is  brisk  and  the  price  is  high.  No 
such  rapid  readjustment  can  be  made  with  regard  to  the 
labor  supply  because  it  comprises  human  beings.  The 
prolongation  of  infancy  prevents  a  spontaneous  increase 
in  the  available  supply  of  labor,  and  moral  laws  against 
the  destruction  of  human  life  preclude  an  immediate  re- 


Unemployment  215 

duction  in  the  supply.  Thus  a  falling  off  in  the  demand 
for  labor  is  accompanied  by  an  increase  in  its  supply,  with 
the  result  that  the  price  of  labor  is  greatly  reduced;  a 
rapid  rise  in  the  demand  for  labor  enhances  its  price.  It 
is  the  impossibility  of  reducing  the  labor  supply  when 
demand  falls  off  that  makes  the  unemployment  problem 
so  acute. 

The  Extent  of  Unemployment. — Complete  statistics  of 
the  extent  of  unemployment  among  industrial  wage- 
earners  are  not  available,  but  thorough  investigations 
have  made  possible  reliable  estimates.  Wage-earners  in 
the  principal  manufacturing  and  mining  industries  in  the 
United  States  lose  on  an  average  from  one-fifth  to  one- 
fourth  of  the  working  time  during  normal  years,  and  in 
highly  organized  trades  and  industries,  during  periods  of 
greatest  industrial  activity,  from  7  to  20  per  cent  of  all 
the  members  of  unions  are  unemployed  during  the  year. 
In  the  winter  months  of  any  year  the  army  of  unemployed 
in  our  great  cities  numbers  several  hundred  thousand, 
while  in  periods  of  industrial  depression  several  million 
workers  are  unemployed.  The  United  States  Census  for 
1900  showed  that  6,468,964  working  people,  or  nearly, 
one-fourth  of  all  persons  engaged  in  gainful  occupations, 
had  been  unemployed  some  time  during  the  year.  Of 
these,  more  than  3,000,000  lost  from  one  to  three  months 
of  work  and  more  than  736,000  lost  from  seven  to  twelve 
months.  More  than  27  per  cent  of  the  total  number  of 
persons  employed  in  manufacturing  and  mechanical  pur- 
suits were  out  of  work  at  some  time  during  the  census 
year.  From  1,000,000  to  6,000,000  workers,  exclusive  of 
farm  laborers,  were  idle  in  the  United  States  at  all  times 
between  1902  and  1917,  the  average  number  unemployed 
being  two  and  one-half  million  workers,  or  nearly  10  per 
cent  of  the  active  supply.  At  least  4,000,000  workers  who 
were  employed  in  September,  1907,  were  unemployed  in 
January,  1908.2  The  unemployment  period  of  1907-1908 
had  scarcely  subsided  when  the  outbreak  of  the  war  in 

1  Hornrll  Hart,  Fluctuations  in  Unemployment  (n  the  Citiet  of 
UK  United  States,  1901-1917,  pp.  51,  52, 


216  Unemployment 

Europe  caused  a  severe  slump  in  American  industry  and 
business.  During  1914-1915  at  least  2,000,000  were  forced 
into  idleness  and,  if  those  who  were  working  only  part- 
time  be  included,  the  total  reached  about  7,000,000.  So 
little  time  had  the  workers  in  which  to  recover  from  the 
depression  of  1907-1908  that  the  suffering  was  tre- 
mendous. 

Quick  recovery  in  business  conditions  was  made  pos- 
sible by  the  abnormal  demand  for  American  goods  by 
European  belligerents,  but  after  about  four  years  of  pros- 
perity depression  and  unemployment  again  set  in  on  an 
unmistakably  large  scale,  in  the  fall  of  1920.  In  June, 
1921,  estimates  put  the  number  of  idle  workers  at 
4,000,000,  with  at  least  as  many  more  working  only  part- 
time.  In  August  the  United  States  Bureau  of  Labor 
Statistics  completed  a  survey  which  showed  that  the  num- 
ber of  unemployed  had  reached  a  total  of  5,735,000. 
There  were  more  than  3,900,000  less  persons  employed  in 
manufacturing  and  mechanical  industries  in  July,  1921, 
than  in  January,  1920.3  A  canvass  of  idleness  in  917 
cities,  made  by  the  American  Federation  of  Labor,  indi- 
cated that  approximately  4,000,000  workers  were  unem- 
ployed. The  most  conservative  estimates  stated  that  over 
one-quarter  of  the  industrial  wage-earners  were  out  of 
work  June  1,  1921,  representing  an  estimated  total  of 
about  3,500,000.  The  depression  in  business  and  industry 
continued,  reductions  in  the  labor  force  ranging  from  19 
to  70  per  cent  in  the  basic  industries,  and  in  April,  1922, 
the  situation  was  practically  unchanged.  Millions  of 
workers  were  employed  only  part-time. 

It  is  important  to  remember  that  the  problem  of  unem- 
ployment is  not  confined  to  recurrent  periods  of  depres- 
sion but  that  an  average  of  more  than  2,000,000  workers, 
or  about  15  per  cent  of  the  industrial  wage-earners  of  the 
country,  are  unemployed  during  normal  times.  The 
experience  of  the  principal  industrial  states  of  Massachu- 
setts, New  York,  Pennsylvania,  and  Illinois  indicates  that 

•Estimates  furnished  the  U.  S.  Senate  on  August  12,  1921,  by  the 
U.  S.  Bureau  of  Labor  Statistics, 


Unemployment  217 

the  average  number  of  days  lost  per  annum  by  industrial 
wage-earners  is  about  forty-two,  or  approximately  14  per 
cent  of  each  laborer's  total  working  time.  This  figure 
does  not  include  the  losses  of  part-time  employees  for 
whom  no  reliable  information  is  available.  The  yearly 
percentage  of  unemployed  organized  workers  is  about  10 
per  cent  in  normal  years  and  20  per  cent  in  years  of 
industrial  depression.  Trade  unions  include  chiefly 
skilled  workers  who  are  the  last  to  be  laid  off  in  slack 
times.  The  percentage  of  unskilled  workers  without  em- 
ployment is  higher  because  they  are  the  first  to  be  laid  off 
when  business  slumps;  the  minimum  estimates  put  the 
percentage  of  unemployment  among  the  unskilled  at  3  or 
4  per  cent  above  that  for  the  skilled  workers.  Even  in 
the  phenomenal  years  of  1917  and  1918,  when  the  United 
States  experienced  unprecedented  industrial  activity  and 
when  unemployment  reached  its  lowest  point  in  twenty 
years,  there  was  a  margin  of  unemployment  amounting 
to  more  than  a  million  men.  Thus,  unemployment 
appears  as  a  constant  economic  problem. 

Some  industries,  such  as  the  building  trades,  mining, 
and  the  clothing  trades,  show  a  relatively  high  percentage 
of  unemployment,  while  industries  such  as  the  printing 
trades  show  a  relatively  low  percentage.  Investigations 
have  shown  that  the  building  trades  workman  is  employed 
only  about  190  days  in  the  year,  or  approximately  63  per 
cent  of  his  time ;  the  clothing  worker  is  idle  about  31  per 
cent  of  the  year;  the  average  shoemaker  spends  only  65 
per  cent  of  his  time  at  work;  and  during  the  last  thirty 
years  bituminous  coal  miners  have  been  idle  an  average 
of  about  93  possible  working  days  a  year.4  In  normal 
years  bituminous  coal  miners  are  given  only  215  days  of 
work  out  of  a  possible  308  days,  while  in  years  of  severe 
depression,  as  1893  and  1921,  they  worked  only  170  days. 
It  is  evident,  therefore,  that  unemployment  is  not  an 
occasional  or  accidental  condition  to  be  met  by  charitable 
relief,  but  a  permanent  problem  which  in  recurrent 

*8ec  the  Report  of  ihe  Committee  on  Industrial  Watte,  Federated 
American  Engineering  Societies, 


218  Unemployment 

periods  of  business  depression  becomes  extremely  acute; 
a  problem  whose  magnitude  should  command  much  more 
thoughtful  attention  than  it  is  given. 

The  problem  of  unemployment  is  not  confined  to  the 
United  States.  A  similar  situation  exists  in  practically 
every  country,  particularly  in  advanced  industrial  nations 
such  as  Great  Britain,  France,  and  Germany.  Official 
investigations  indicate,  however,  that  unemployment  is 
more  intense  in  the  United  States  than  in  other  countries. 
The  report  of  the  organizing  committee  of  the  Inter- 
national Labor  Conference  held  in  Washington,  District 
of  Columbia,  November,  1919,  showed  that  the  mean  per- 
centage of  unemployment  in  certain  trades  for. the  period 
1904  to  1913  was  2.1  in  Germany,  2.7  in  Belgium,  4.7  in  the 
United  Kingdom,  7.8  in  France,  and  15.2  in  New  York, 
which  was  taken  as  typical  of  the  United  States.  The 
committee  concluded  that  industrial  fluctuations  are  more 
pronounced  in  the  United  States  than  in  most  other  coun- 
tries and  that  as  a  consequence  the  variation  in  the  per- 
centage of  unemployment  is  greater.  The  prewar  per- 
centage of  unemployment  in  the  United  States  was 
normally  about  three  times  as  great  as  in  England  or 
Germany,  and  the  fluctuations  were  more  violent.5  In 
explanation  of  this  difference,  the  Secretary  of  Labor 
suggested  that  the  working  population  easily  finds  its 
level  and  consequently  unemployment  is  comparatively 
light  in  relatively  small,  compact,  and  densely  populated 
industrial  communities  as  England  or  Belgium,  or  in  one 
as  highly  organized  as  Germany  prior  to  the  war.  In  the 
United  States,  on  the  other  hand,  vast  in  territory  and 
possessing  a  great  diversity  of  industries  scattered  over  a 
wide  area,  the  unemployed  worker  is  too  often  stranded 
in  the  community  in  which  he  finds  himself.  His  igno- 
rance of  the  labor  market  and  the  great  distance  that 
separates  him  from  the  opportunity  for  work  more  than 
neutralize  the  greater  mobility  commonly  attributed  to 

'Eighth  Annual  Eeport  of  the  Secretary  of  Labor,  1920,  pp. 
142,  143, 


Unemployment  219 

the  American  wage-earner.6  The  problem  of  unemploy- 
ment in  the  United  States,  therefore,  is  not  only  more 
continuous  but  more  acute  than  in  smaller  countries,  and 
its  solution  is  correspondingly  more  difficult. 

The  Causes  of  Unemployment. — Many  classifications  of 
the  causes  of  unemployment  have  been  made,  but  they 
have  differed  more  in  form  than  in  content.7  A  knowl- 
edge of  the  causative  factors  of  unemployment  is  funda- 
mental to  a  proper  understanding  of  the  problem  and  the 
proposed  solutions.  These  causative  conditions  fall  into 
four  main  classes. 

1.  Social  conditions,  or  those  which  develop  from  a  lack 
of  proper  social  control.    These  include: 

(a)  Unequal  distribution  of  wealth  and  income. 
(&)  Monopolization  of  land. 

(c)  Immigration. 

(d)  Inadequate  organization  of  the  labor  market. 

(e)  Insufficient  provision  for  industrial  training. 

2.  Economic  conditions,  or  those  which   develop   from 
changes  and  deficiencies  in  industrial  and  business  organ- 
ization and  operation.    These  embrace: 

(a)   Evolutionary  changes  in  industry. 
(&)  Seasonal  fluctuations  in  industry. 

(c)  Cyclical  fluctuations  in  industry. 

(d)  The  existence  of  a  labor  reserve. 

(e)  Strikes  and  lockouts. 

(/)  Deficiencies  in  industrial  management. 

(gr)  Wasteful  methods  of  commodity  distribution. 

(Ji)  Overexpansion  of  credit. 

8.  Personal  conditions,  or  those  attributable  to  the  fail- 
ure of  the  individual  to  adjust  himself  to  employment. 
Among  these  are : 

(a)  Physical  and  mental  disability. 

(6)  Economic  inefficiency. 

(c)  Moral  deficiency. 

•Ibid.,  p.  199. 

f  Cf.  Boveridge,  Unemployment:  A  Problem  of  Industry;  Lesoohier, 
The  Labor  Market;  National  Industrial  Conference  Board,  The  Un- 
employment Problem;  United  Stated  Industrial  Comroiwion,  Final 
Eepnrt,  Vol.  XIX,  pp.  746-763;  United  States  Commission  on  Indus- 
trial  Relations,  Final  Bcport,  pp.  36-38 ;  104,  105. 


220  Unemployment 

4.  Political  conditions,  or  those  resulting  from  deficien- 
cies in  governmental  policy.  Here  may  be  mentioned : 

(a)  The  fiscal  policy. 

(6)  The  tariff  policy. 

(c)   The  international  policy. 

1.  Social  Conditions. —  (a)  Unequal  distribution  of 
wealth  and  income. — Inequalities  in  the  distribution  of 
wealth  and  income  mean  that  the  great  mass  of  the  popula- 
tion is  deprived  of  purchasing  power,  while  a  minority 
have  more  of  such  power  than  they  can  use  and  must 
invest  their  surplus  in  productive  enterprises.  This  results 
in  further  concentration  of  wealth  and  greater  disparities 
in  the  distribution  of  income.  A  few  live  in  affluence  while 
the  many  are  inadequately  fed,  poorly  clothed,  badly 
housed,  and  uneducated.  In  view  of  such  disparity  it  is 
idle  to  speak  of  overproduction  as  the  cause  of  unem- 
ployment ;  rather  is  it  a  lack  of  buying  power  on  the  part 
of  the  majority  of  the  population.  The  home  market  re- 
mains undeveloped  so  long  as  many  people  are  unable 
financially  to  purchase  the  bare  necessities,  to  say  nothing 
of  the  reasonable  comforts  of  life.  An  impoverished  pop- 
ulation is  a  poor  trade  asset;  the  relative  inability  of  the 
wage-earning  classes  to  buy  is  a  direct  cause  of  the  dis- 
counting of  the  home  market  and  the  resultant  unemploy- 
ment. It  is  well  to  remember  not  only  that  lack  of  pur- 
chasing power  curtails  demand  for  the  products  of  industry 
and  causes  unemployment,  but  also  that  unemployment  in 
turn  decreases  further  the  ability  to  purchase  and  the 
necessity  for  production.  Unemployment  in  basic  indus- 
tries soon  slows  up  production  in  less  essential  industries 
such  as  the  manufacture  of  automobiles,  and  the  wave  of 
unemployment  spreads. 

(b)  Monopolization  of  land. — The  lack  of  easy  access  to 
unused  land  and  natural  resources,  except  at  a  price  and 
under  conditions  prohibitive  to  the  average  worker,  has 
often  been  cited  as  a  prominent  cause  of  unemployment. 
More  than  a  decade  ago  it  was  estimated  that  about  four- 
fifths  of  the  area  of  the  large  land  holdings  was  being  held 
out  of  active  use  by  their  50,000  owners,  while  2,500,000 


Unemployment 

farmers  were  struggling  for  a  bare  subsistence  on  farms 
of  less  than  50  acres  and  the  ranks  of  the  unemployed  in 
cities  were  filled  with  men  who  could  and  would  cultivate 
these  lands.  Many  of  the  larger  farms  are  held  for  specula- 
tion by  real  estate  dealers  and  bankers  who  have  indepen- 
dent sources  of  income.  There  is  a  definite  tendency  on  the 
part  of  owners  of  large  tracts  to  monopolize  the  best  areas 
of  timber  and  agricultural  lands  in  the  United  States. 

(c)  Immigration.— Largely    in   response   to    an    active 
demand    for    labor,    the   movement    of    population    from 
Europe  to  the  United  States  has  surpassed  all  labor  migra- 
tions in  human  history.     The  stream  of  immigration  has 
been  fairly  continuous,  reaching  the  enormous  figure  of 
1,285,349  in  1907,  and  1,218,480  in  1914.     Between  1900 
and  1917  immigration  was  responsible  for  a  net  addition  to 
our  population  of  10,000,000  persons.    There  is  no  accurate 
adjustment  between  this  incoming  tide  and  the  demand  for 
labor;  the  great  mass  of  immigrants  seek  more  congenial 
homes  and   come  to  stay.     Since  immigration  does  not 
adjust  itself  to  the  demand  for  labor  it  results  in  an  over- 
supply  of  unskilled  labor,  which  means  a  less  number  of 
working  days  and  less  income  for  those  who  are  already 
here.     Voluntary  or  involuntary  displacement  of  native 
American  and  older  immigrant  workers  causes  unemploy- 
ment for  the  latter  groups.    Moreover,  the  presence  of  a 
large  supply  of  cheap  labor,  coupled  with  the  willingness 
of  immigrants  to  work  long  hours,  makes  possible  the  con- 
centration of  production  in  seasonal  trades. 

(d)  Inadequate  organization  of  the  labor  market. — The 
absence  of  a  national  system  of  labor  distribution  is  an 
important  factor  in  unemployment  in  the  United  States. 
Because  there  is  no  centralized  and  coordinated  system  of 
employment  offices,  the  coexistence  of  a  labor  surplus  and 
a  labor  shortage  is  common.    The  supply  of  labor  may  be 
excessive   in   the    eastern    states    and    inadequate    in    the 
western  states,  but  there  is  no  scientific  social  system  for 
the  effective  distribution  of  the  workers  from  one  section  of 
the  country  to  another.    The  workers'  lack  of  information 
about  employment  and  their  immobility  are  difficulties  that 


can  be  overcome  only  by  a  comprehensive  system  of  public 
employment  offices. 

(e)  Insufficient  provisions  for  industrial  training. — The 
failure  of  society  to  provide  an  adequate  system  of  indus- 
trial education  and  training  has  been  one  of  the  most  sig- 
nificant causes  of  idleness.  Inefficient  labor  increases  costs 
of  production  and  weakens  the  employer  in  competition 
with  more  efficient  enterprisers,  with  the  result  that  orders 
fall  off  and  the  working  force  is  curtailed  or  laid  off  com- 
pletely. Graduation  into  unemployment  is  the  logical 
sequence  of  the  recruitment  of  the  nation's  labor  supply 
from  hundreds  of  thousands  of  youths  who  have  no  suitable 
vocational  and  industrial  training.  Official  investigations 
in  several  countries  have  shown  conclusively  that  unem- 
ployment is  continually  being  augmented  by  a  stream  of 
young  men  from  industries  which  rely  upon  unskilled  boy 
labor  and  turn  it  adrift  at  manhood  without  any  general  or 
special  industrial  qualification.  The  flood  of  youth  that 
annually  goes  into  "blind  alley"  or  "dead  end"  occupa- 
tions will  have  to  be  arrested  if  unemployment  is  to  be 
reduced.  Such  occupations  are  the  breeding  grounds  for 
the  low-grade  casual  type  of  laborer  which  forms  the  chief 
element  in  the  underemployed  and  unemployable  classes. 
Vicious  habituation,  irregularity,  and  immorality  have 
been  the  results  of  lack  of  industrial  quality.  Industrial 
training  is  fundamental  to  the  possession  of  industrial 
adaptability. 

2.  Economic  Conditions. — (a)  Evolutionary  changes  in 
industry. — The  labor  force  in  modern  industry  is  in  a  state 
of  continual  flux  on  account  of  the  frequent  changes  and 
rearrangements  in  industrial  organization,  methods,  and 
processes.  The  rise  of  new  industries  and  the  decay  of 
old  ones,  the  introduction  of  new  machinery  and  the 
adoption  of  better  methods  and  processes,  the  substitution 
of  one  kind  of  labor  for  another,  and  the  regional  shift 
in  the  location  of  an  industry  or  group  of  industries  all 
result  in  making  certain  forms  of  skill  superfluous  and  in 
throwing  workers  out  of  employment.  Changes  in  indus- 
trial machinery,  methods,  and  processes,  cause  only  tern- 


porary  distress  among  the  workers,  since  these  changes 
tend  to  reduce  the  cost  of  production  and  consequently 
the  prices  of  commodities,  thus  bringing  the  goods  within 
the  buying  ability  of  a  larger  number  of  persons  and 
stimulating  demand.  Increased  demand  calls  for  greater 
production  and  the  employment  of  a  larger  working  force. 

The  extent  of  injury  resulting  from  the  introduction 
of  new  machinery,  methods,  and  processes  depends  ulti- 
mately upon  the  immediate  prospects  of  reemployment 
In  other  lines  of  work.  The  McKay  sewing  machine  sews 
uppers  on  the  soles  of  100  pairs  of  shoes  in  one  hour  and 
thirty-eight  minutes,  as  compared  with  98  hours  with  the 
use  of  the  awl,  pincers,  and  strap  which  were  used  in 
hand  methods.  One  man  is  thus  able  to  do  the  work  of 
sixty.  As  a  result  of  this  invention  considerable  suffering 
was  experienced  by  the  shoemakers.  The  workers  in 
many  trades  have  protested,  often  with  violence,  against 
the  introduction  of  improved  machine  methods.  Type- 
setting machines,  which  were  introduced  on  a  general 
scale  in  the  business  depression  of  1893,  resulted  in  unem- 
ployment for  thousands  of  compositors,  but  with  the 
return  of  prosperity  even  a  larger  number  were  required 
to  meet  the  needs  of  the  trade,  because  the  cost  of  print- 
ing was  reduced.  Moreover,  in  periods  of  industrial  pros- 
perity when  labor  is  scarce  enterprisers  introduce 
improved  machinery,  while  in  periods  of  industrial 
depression  and  unemployment  the  tendency  is  to  employ 
proportionately  more  labor  and  less  capital.  Except  for 
particular  classes,  the  workers  do  not  suffer  severely  as  a 
result  of  evohitionary  changes  in  industry,  because  these 
changes  are  gradual  and  tend  to  increase  the  demand  for 
labor  by  decreasing  the  price  of  the  commodity.  Con- 
siderable unemployment  may  be  caused  by  such  exigencies 
as  business  failure,  business  reorganizations  and  mergers, 
destruction  of  the  plant  by  fire,  and  the  death  of  the  em- 
ployer. 

(6)  Seasonal  fluctuations  in  industry.  —  Industrial 
fluctuations  are  of  two  types:  seasonal  variations,  in 
which  the  complete  cycle  of  falling  and  increasing  de- 


224  Unemployment 

mand  is  completed  within  a  period  of  one  year;  and 
cyclical  fluctuations,  in  which  the  change  extends  over  a 
number  of  years.  The  former  are  trade  variations, 
usually  affecting  each  trade  or  group  of  trades  in  a 
peculiar  and  distinctive  manner  at  a  particular  time, 
while  the  latter  affect  practically  all  trades  alike,  result- 
ing in  fairly  uniform  periods  of  activity  and  depression. 

Seasonal  fluctuations  are  caused  by  changes  in  climatic 
conditions,  seasonal  changes  in  consumption,  and  the 
tyrannous  and  exacting  demands  of  fashion.  Climate  is 
the  sole  determinant  of  cultivating,  sowing,  and  harvesting 
periods  in  agricultural  industries  and  all  activities  de- 
pending upon  these,  such  as  canning.  Weather  likewise 
affects  building  activities.  Coal  mining  and  the  manu- 
facture of  gas,  the  canning  of  fruits  and  vegetables,  and 
the  manufacture  of  clothing  are  influenced  by  seasonal 
consumption.  Climatic  changes  and  seasonal  variations  in 
consumption  have  an  adverse  effect  upon  wage-earners, 
resulting  in  peaks  of  demand  in  spring  and  fall,  with 
slight  variation  in  midsummer  and  a  marked  depression 
in  winter.  Peaks  of  high  production  and  hollows  of  low 
production  vary  in  time,  regularity,  and  range  with  the 
different  trades,  and  are  less  marked  in  large-scale  than 
in  small-scale  industries.  A  study  of  unemployment  in 
cities  of  the  United  States  from  1902  to  1917  showed  that 
the  average  number  of  unemployed  tended  to  be  greatest 
in  January,  averaging  three  and  one-third  millions,  and 
least  in  October,  averaging  less  than  two  millions.  Agri- 
cultural pursuits,  employing  about  13,000,000,  have  a  very 
high  summer  peak,  but  release  several  million  laborers  in 
the  winter,  a  large  number  of  whom  drift  to  our  cities 
where  they  swell  the  already  abnormal  labor  surplus.8 
Manufacturing  industries  show  similar  irregularities  in 
employment.  In  the  state  of  New  York  the  percentage 
of  union  workers  reported  idle  in  the  month  of  March 
averaged  23.4  per  cent  during  the  period  1904-1915, 
while  the  average  for  September  in  the  same  period  was 
only  13.4  per  cent.  In  Massachusetts  the  average  in 

•Hornell  Hart,  op.  cit.,  pp.  55,  56. 


Unemployment  225 

March  for  the  period  1908-1919  was  11.4  per  cent,  and  for 
September  only  6.4  per  cent.  The  experiences  of  these 
states  are  typical  of  those  in  other  states. 

The  tragedy  of  seasonal  employment  lies  in  its  tendency 
to  build  up  in  each  industry  a  labor  reserve  to  meet  the 
demands  of  the  busy  season,  thus  causing  not  only  unem- 
ployment at  specified  times  but  underemployment  during 
the  rest  of  the  year.  In  only  a  few  industries,  where  labor 
is  highly  skilled  and  well  organized,  such  as  glass  blowing 
and  the  building  trades,  are  the  workers  able  to  command 
a  wage  sufficient  to  tide  them  over  slack  periods.  In  such 
occupations  as  coal  mining,  railway  track  work,  and  the 
manufacture  of  clothing  the  wage  scale  is  insufficient  to 
compensate  for  lost  time. 

(c)  Cyclical  fluctuations  in  industry. — Seasonal  varia- 
tions cause  less  social  injury  than  fluctuations  which  occur 
in  longer  cycles.  Cycles  of  business  prosperity  and  de- 
pression are  a  prominent  characteristic  of  modern  indus- 
trialism; periods  of  great  industrial  activity  alternate 
with  periods  of  general  business  depression.  From  ten  to 
fifteen  years  is  required  for  a  wave  of  unemployment  to 
rise  to  a  high  peak  and  fall  again  to  a  low  level,  and 
within  these  greater  waves  there  are  small  fluctuations 
with  lessened  employment  occurring  every  four  or  five 
years.  In  the  United  States,  for  example,  relatively  great 
unemployment  resulted  from  general  industrial  depres- 
sion in  1892-1893,  1904-1905,  1907-1908,  1913-1914,  and 
1920-1922.  Except  for  minor  variations,  general  pros- 
perity characterized  the  years  between  these  states.  Panics 
and  depressions  stop  the  wheels  of  industry  and  cause 
immeasurable  suffering  to  the  working  classes.  Lack  of 
orders  accompanying  the  depression  of  1920-1922  was 
responsible  for  fully  60  per  cent  of  the  general  wave  of 
unemployment  in  the  United  States. 

Recurrent  periods  of  prosperity  and  depression  have  led 
many  persons  to  believe  that  modern  industry,  based  on 
the  competitive  system  and  uncontrolled  by  state  action, 
can  grow  only  through  a  succession  of  periods  of  rapid 
expansion  followed  by  actual  or  relative  contraction. 


Unemployment 

There  have  been  numerous  attempts  to  explain  these 
cyclical  fluctuations.  Underconsumption  is  said  by  some 
to  be  the  basic  cause,  The  existence  of  surplus  incomes 
leads  to  oversaving  and  investment  of  capital  by  a  few, 
while  at  the  same  time  the  great  mass  of  people  are  with- 
out purchasing  power.  The  problem,  therefore,  is  how  to 
make  the  demand  effective,  that  is,  to  increase  the  con- 
suming power  of  the  masses.  Overproduction  is  often 
mentioned  as  the  fundamental  cause  of  depression  and 
unemployment.  This  is  true  only  if  overproduction  in 
relation  to  effective  demand  is  meant,  since  there  can  be 
no  such  thing  as  general  overproduction  when  the  major- 
ity of  the  world's  population  is  deprived  of  the  necessities 
and  reasonable  comforts  of  life.  Other  persons  have  con- 
tended that  the  trouble  lies  in  competition ;  the  eagerness 
to  get  as  large  as  possible  a  share  of  the  market  and 
profits  leads  sooner  or  later  to  joint  production  in  excess 
of  effective  demand  and  glutting  of  the  market.  The 
result  is  that  depression  and  unemployment  prevail  until 
accumulated  stocks  of  commodities  are  cleared  and  de* 
mand  is  revived.  There  are  many  who  blame  overexpan* 
sion  of  credit  in  prosperous  times  as  the  basic  factor. 
These  explanations  are  not  so  different  as  they  appear; 
they  approach  the  problem  from  slightly  different  angles, 
but  come  to  practically  the  same  conclusion.  There  are 
many  other  theories  of  cyclical  fluctuations  that  cannot  be 
discussed  here  for  want  of  space. 

(d)  The  labor  reserve. — There  is  an  irreducible  mini- 
mum of  unemployment  developing  from  the  presence  of 
a  labor  reserve  which  accumulates  in  modern  industries. 
This  reservoir  of  labor  consists  of  those  persons  whose 
services  are  required  more  or  less  irregularly.  The  size 
of  this  reserve  depends  upon  the  number  of  different 
employers,  the  changing  fortunes  and  irregularities  of 
particular  business  enterprises  and  of  industry  in  general, 
the  relative  mobility  of  the  labor  force,  the  average  length 
of  engagements  for  work,  methods  of  labor  management, 
and  the  system  of  labor  placement  and  distribution.  The 


Unemployment 

anomalous  coexistence  of  a  labor  shortage  and  a  labor 
surplus  arises ;  frequently  a  million  and  a  quarter  workers 
are  idle  in  periods  of  unprecedented  demand.  Even  in 
normal  times  an  army  of  idle  men  stands  at  factory  gates 
seeking  employment  or  hangs  around  employment  offices 
and  loafing  places.  Some  of  these  will  not  work,  some 
cannot  fit  into  the  available  jobs,  some  are  ignorant  of 
employment  opportunities,  a  certain  class  are  never  con- 
tented with  any  job,  and  many  could  not  move  to  the 
locality  where  work  is  available. 

(e)  Strikes  and  lockouts. — The  importance  of  strikes 
and  lockouts  as  a  factor  in  unemployment  is  grossly 
exaggerated;  the  time  lost  on  account  of  labor  disputes 
is  relatively  insignificant.  Unemployment  arising  from 
labor  disputes  averaged  less  than  one  per  cent  among  the 
organized  wage-earners  of  Massachusetts  during  the 
period  1908-1920,  and  in  New  York  State  the  average  was 
less  than  two  per  cent  in  the  period  1904-1914.  The 
number  of  man-days  lost  by  all  wage-earners  because  of 
strikes  and  lockouts  has  been  estimated  at  less  than  one 
per  cent  by  the  New  York  State  Board  of  Mediation  and 
Arbitration.  Of  the  11.2  per  cent  of  local  trade  union 
members  reported  as  unemployed  in  Massachusetts,  on 
March  31,  1919,  over  90  per  cent  were  unemployed  be- 
cause of  lack  of  work  rather  than  because  of  disputes  or 
disability.  The  situation  in  these  states  is  typical  of  the 
entire  country. 

(/)  Deficiencies  in  industrial  management. — There  are 
many  particulars  in  which  managerial  inefficiency  con- 
tributes to  unemployment.  High  production  costs,  in- 
effective sales  methods,  lack  of  coordination  between  the 
various  departments  of  the  plant,  inefficient  methods  of 
selection  and  placement  of  employees,  inadequate  facili- 
ties for  industrial  training,  labor  turnover,  and  tho 
absence  of  an  organized  channel  of  communication  be- 
tween management  and  employees  are  some  of  the  reasons 
for  lost  time.  When  production  costs  arc  excessive  tho 
sale  price  of  the  products  must  be  correspondingly  high ; 


228  Unemployment 

this  reduces  sales  and  decreases  production  and  employ- 
ment. Excessive  labor  costs  are  usually  blamed  for  high 
production  costs,  but  management  knows  that  the  numer- 
ous factors  mentioned  above  are  more  important.  Lack 
of  materials  and  equipment  causes  the  plant  to  shut  down 
or  slacken  its  pace  of  production.  The  absence  of  cor- 
relation between  production,  sales,  and  finance  depart- 
ments is  the  cause  of  friction  within  the  business  organiza- 
tion. Overselling  in  certain  seasons  means  concentration 
of  production,  followed  by  a  period  of  inactivity  and 
unemployment.  Labor  turnover,  or  the  shift  and  replace- 
ment in  personnel,  lessens  employment  and  decreases  the 
productivity  of  the  plant.  This  separation  of  men  from 
the  service  of  the  company  is  frequently  the  result  of 
inefficient  methods  of  selection  and  placement,  lack  of 
industrial  training,  and  poor  labor  management  in  gen- 
eral. The  exaction  of  excessive  profits  also  curtails 
demand  and  reduces  production. 

(gr)  Wasteful  methods  of  commodity  distribution. — The 
absence  of  adequate  facilities  for  collecting  and  tabu- 
lating information  about  available  markets  at  home  and 
abroad  often  causes  manufacturers  to  produce  surplus 
commodities.  This  conduces  to  concentration  of  produc- 
tion, recession  in  the  price  of  the  goods,  severe  losses  to 
the  producer  which  are  not  shared  by  the  middleman  who 
retains  the  original  price  level,  and  unemployment. 

(h)  Overexpansion  in  credit. — Professor  Commons  has 
characterized  the  credit  problem  as  our  biggest  labor 
problem,  because  it  lies  at  the  bottom  of  the  question  of 
unemployment,  which  is  the  source  of  the  bitterness  con- 
stantly arising  between  capital  and  labor.  The  failure  of 
capitalism  to  furnish  economic  security  to  labor  is  the  source 
of  industrial  unrest.  Eagerness  for  profits  leads  to  over- 
expansion.  "Prices  rise;  wages  rise;  profits  swell;  every- 
body is  confident  and  overconfident;  speculation  over- 
reaches itself;  the  future  looks  more  assuring  than  it  is; 
too  many  buildings  and  factories  are  constructed;  then 
the  inevitable  collapse.  Hundreds  of  thousands  of  work- 
ingmen  are  laid  off.  Business  establishments  go  into 


Unemployment  229 

bankruptcy  or  liquidation.  The  credit  system  breaks 
down.  Then  the  cycle  repeats  itself. ' ' 9 

3.  Personal  Conditions. — The  personal  equation  is  inti- 
mately related  to  the  problems  of  unemployment  and 
unemployability.  Old  age,  economic  inefficiency,  moral 
degeneracy,  and  physical  and  mental  deficiency  are  prom- 
inent causes  of  idleness. 

(a)  Physical  and  mental  disability. — The  speed  and 
technique  of  modern  industry  demand  a  degree  of  alert- 
ness and  physical  vigor  which  the  worker  in  old  age  does 
not  possess.  Once  past  the  meridian  of  his  life,  the  indus- 
trial worker  finds  it  difficult  to  secure  employment.  Some 
investigations  have  shown  that  one-fourth  of  the  idle 
workers  covered  in  the  surveys  were  unable  to  reenter 
industry  because  of  age.  From  seven  to  nine  working- 
days  out  of  a  possible  three  hundred  are  lost  annually  by 
wage-earners  on  account  of  sickness,  and  many  more  be- 
cause of  accidents.  Mental  deficiency  lessens  adaptability 
to  the  needs  of  industry  and  keeps  many  out  of  work. 

(6)  Economic  inefficiency. — Personal  inefficiency  of  em- 
ployees who  do  not  perform  properly  their  assigned  tasks 
results  in  their  being  discharged  and  kept  out  of  employ- 
ment. Laziness,  incompetence  resulting  from  lack  of 
training  or  natural  capacity,  indifference  to  the  wishes  of 
the  employer,  and  carelessness  in  the  use  of  tools,  ma- 
chines, and  materials  cause  many  persons  to  be  released 
from  industry. 

(c)  Moral  deficiency. — Each  nation  has  its  fringe  of 
moral  deficients.  These  include  the  nomad,  who  lives  by 
begging,  blackmail,  or  pillage;  the  settled  resident  loafer; 
the  intermittent  loafer  who  usually  has  a  dependent 
family;  and  the  criminal.  Idleness  has  a  reflex  influence 
affecting  personal  failings,  since  unemployment  itself 
breeds  inefficiency  and  moral  delinquency.  Intemperance, 
vice,  bad  disposition,  and  many  other  expressions  of  tem- 
perament and  bad  habit  contribute  no  small  share  to 
idleness. 

'John  R.  Commons,  "Prevention  of  Unemployment,"  American 
Labor  Legitlation  Review,  Vol.  XII,  No.  1,  March,  1922,  pp.  19,  20. 


830  Unemployment 

4.  Political  Conditions. — The  extent  to  which  political 
conditions  affect  production  and  unemployment  cannot 
be  measured.  Industry  and  business  are  sensitive  to 
changes  and  movements  in  political  relations,  whether 
domestic  or  international;  the  securities  market  reacts 
quickly  to  favorable  or  unfavorable  political  news. 

(a)  The  fiscal  policy. — Business  men  in  industrial  coun- 
tries have  laid  great  emphasis  in  recent  years  upon  the 
disturbing  influence  of  taxes  on  industrial  and  business 
enterprises.  Uncertainty  with  regard  to  the  financial 
policy  of  the  government  and  the  imposition  of  heavy 
taxes  on  incomes  and  excess  profits  have  been  condemned 
as  causes  of  business  depression.  If  industry  should  be 
overburdened  with  taxation  industrial  enterprise  would 
be  discouraged,  but  taxation  has  not  yet  become  an  impor- 
tant cause  of  unemployment  in  the  United  States. 

(6)  The  tariff  policy. — Advocates  of  protective  tariffs 
contend  that  the  lowering  of  tariffs  on  particular  com- 
modities subjects  domestic  producers  to  severe  competi- 
tion with  foreign  goods  produced  at  lower  costs,  thus 
destroying  the  home  market  and  cutting  down  production 
and  employment.  Crises,  panics,  business  depressions, 
and  price  deflations  are  sometimes  attributed  to  a  reduc- 
tion in  tariff  schedules.  To  a  certain  extent  tariff  reduc- 
tions result  in  the  dumping  of  foreign-made  goods  upon 
the  domestic  market,  but  there  is  no  reason  for  classifying 
this  as  an  important  cause  of  unemployment.  All  the 
economic  maladjustments  attributed  to  the  lowering  of 
tariffs  are  experienced  periodically  by  Great  Britain  and 
other  nations  which  for  a  long  period  of  years  have  had 
a  free-trade  policy.  Moreover,  protective  tariffs  make 
possible  the  maintenance  of  a  relatively  high  price  level 
by  domestic  producers,  thereby  increasing  the  cost  of  com- 
modities to  the  wage-earners  and  reducing  their  real  buy- 
ing power — a  basic  cause  of  unemployment.  Finally,  high 
tariffs  result  in  the  adoption  by  other  nations  of  retali- 
atory tariffs  against  American-made  goods,  thus  destroy- 
ing our  foreign  markets  and  causing  diminished  produc- 
tion and  unemployment. 


Unemployment  231 

(c)  The  international  policy. — Regularity  of  production 
and  a  stabilized  price  level  are  promoted  by  world  peace 
and  disturbed  by  war  and  preparation  for  war.  Arma- 
ment causes  the  unproductive  use  of  wealth,  and  war 
results  in  enormous  waste  of  human  resources.  Inter- 
national conflicts  take  millions  of  men  from  productive 
industries  and  put  the  burden  of  supporting  them  upon 
those  who  are  left  in  economic  life.  Great  reduction  in 
the  price  of  commodities  and,  consequently,  an  increase  in 
effective  demand  would  result  if  the  billions  of  dollars 
spent  for  war  and  preparation  for.  war  were  directed  into 
the  production  of  necessities.  Moreover,  war  and  military 
life  tend  to  encourage  a  love  for  noneconomic  activities, 
and  the  millions  of  men  who  are  wounded  suffer  an  im- 
measurable loss  of  industrial  capacity.  In  the  absence  of 
a  systematic  plan  of  rehabilitation  these  men  become 
unemployable.  Increased  productivity  and  employment 
resulting  temporarily  from  war  are  invariably  followed 
by  an  extended  period  of  business  depression  and  general 
unemployment. 

The  Migratory  Laborer. — The  unemployment  problem 
in  the  United  States  is  aggravated  by  the  presence  of  the 
''floating"  or  "migratory"  laborer.  It  has  been  esti- 
mated that  in  all  probability  there  are  several  millions  of 
American  workers  who  are  not  attached  definitely  either 
to  any  particular  locality  or  to  any  special  line  of  indus- 
try.10 The  problem  of  the  migratory  worker  arises  from 
the  seasonal  character  of  certain  industries,  the  large 
geographic  area  of  the  country,  and  several  other  factors ; 
it  is  closely  related  to  the  problem  of  the  tramp.  Migra- 
tory workers  tend  to  sink  to  the  rank  of  nonworkers,  to 
increase  the  irregularity  of  their  working  periods,  and  to 
intensify  the  general  problem  of  unemployment.  These 
workers  move  continually  from  one  section  of  the  United 
States  to  another  in  response  to  the  opportunities  for 
employment.  They  engage  in  seasonal  occupations  such 
as  harvesting  of  crops  in  the  summer  and  autumn,  lumber- 

"U.  8.  Commission  on  Industrial  Relations,  Final  Report,  1916, 
p.  101. 


232  Unemployment 

ing  and  ice-cutting  in  the  winter,  and  construction  work 
in  the  spring  and  summer.  They  make  up  the  army  of 
casuals  whose  peculiar  psychology  and  mode  of  life  inject 
into  the  American  labor  movement  a  distinctly  radical 
element.  In  addition  to  these  regular  migrants  there  are 
considerable  numbers  of  laborers  who  move  irregularly 
on  account  of  depression  in  different  trades  and  localities, 
or  because  of  false  rumors  of  opportunities  for  work. 
Many  of  these  acquire  habits  of  migration. 

The  United  States  Commission  on  Industrial  Relations 
disclosed  the  serious  phases  of  the  migratory  labor  prob- 
lem. The  number  of  migratory  workers  appears  to  be 
increasing  relatively  and  absolutely.  A  considerable  por- 
tion have  become  migrants  because  of  peculiar  personal 
characteristics  or  weaknesses,  which  are  accentuated  by 
the  conditions  under  which  migrants  must  work  and  live. 
But  apart  from  individual  characteristics,  American  in- 
dustry demands  a  labor  reserve  for  its  seasonal  industries. 
It  has  been  found  that  an  increasingly  large  proportion  of 
these  casuals  degenerate,  economically  and  socially. 
"Young  men,  full  of  ambition  and  high  hopes  for  the 
future,  start  their  life  as  workers,  but  meeting  failure 
after  failure  in  establishing  themselves  in  some  trade  or 
calling,  their  ambitions  and  hopes  go  to  pieces,  and  they 
gradually  sink  into  the  ranks  of  migratory  and  casual 
workers.  Continuing  their  existence  in  these  ranks,  they 
begin  to  lose  self-respect  and  become  'hoboes.'  After- 
wards, acquiring  certain  negative  habits,  as  those  of 
drinking  and  begging,  and  losing  self-control,  self-respect, 
and  desire  to  work,  they  become  'down-and-outs' — tramps, 
bums,  vagabonds,  gamblers,  pickpockets,  yeggmen,  and 
other  petty  criminals — in  short,  public  parasites,  the  num- 
ber of  whom  seems  to  be  growing  faster  than  the  general 
population. ' ' ll 

The  housing  and  employment  conditions  that  these  men 
must  endure  are  such  as  to  destroy  both  character  and 
physique,  to  make  them  carriers  of  disease,  to  establish 
the  habit  of  migration,  and  to  create  instability.  The 


Unemployment  233 

lodging  houses  and  eating  places  provided  for  these 
laborers  have  been  characterized  as  "unfit  for  human 
beings."  Nor  do  they  escape  these  degrading  influences 
when  they  go  to  the  industrial  centers  from  lumber  camps 
and  other  out-of-the-way  places  of  employment.  Return- 
ing to  the  city  at  the  end  of  their  regular  migrations,  they 
become  the  prey  of  unscrupulous  gamblers,  keepers  of 
houses  of  prostitution,  small  private  bankers,  and  other 
varieties  of  parasites.  As  a  result,  the  earnings  which 
these  migrants  have  left,  after  deduction  of  their  living 
expenses,  rapidly  disappear  and  the  migration  must  begin 
again.12  The  transportation  of  migratory  laborers  is  a 
serious  problem ;  millions  of  them  steal  rides  on  railways, 
with  the  result  that  there  is  congestion  in  certain  railroad 
centers,  waste  of  time  and  energy,  bodily  injury  and  per- 
manent disability,  and  homicide.  The  problem  is  aggra- 
vated by  the  fact  that  the  movement  of  these  individuals 
is  unorganized  and  unregulated,  and  all  attempts  to  direct 
the  movement  have  failed. 

The  Incidence  of  Unemployment. — Unemployment,  ir- 
regular employment,  and  underemployment  are  not  dis- 
tributed evenly  among  the  workers,  on  account  of  indi- 
vidual differences  and  the  changing  industrial  fortunes  of 
each  laborer.  The  incidence  or  final  burden  of  unemploy- 
ment in  its  various  forms  generally  rests  upon  those  who 
are  least  able  to  bear  it.  The  selective  influence  of 
personal  character  is  the  important  factor  here.  When 
production  is  reduced  and  a  part  of  the  working  force 
must  be  laid  off,  the  economically  inefficient,  and  con- 
sequently, the  financially  weak,  are  the  first  to  be  dis- 
missed, and  in  periods  of  industrial  prosperity  and  expan- 
sion these  same  workers  are  the  last  to  be  employed.  It 
is  this  casual  fringe  about  all  industries  that  must  bear 
the  burden  of  minor  industrial  fluctuations.  Idle  because 
of  their  inefficiency,  these  workers  have  their  inefficiency 
accentuated  by  idleness,  and  they  almost  invariably  sink 
into  the  ranks  of  the  unemployable  who  are  dependent 
upon  charity  and  benevolence. 

» Ibid.,  pp.  102,  103. 


234  Unemployment 

Methods  Suggested  for  the  Reduction  and  Prevention 
of  Unemployment. — Abolition  of  unemployment  implies 
perfect  business  adjustment.  It  is  not  clear  that  such  an 
adjustment  is  possible,  but  by  a  combination  of  temporary 
and  permanent  plans  unemployment  can  be  reduced  to  the 
minimum  caused  by  forces  beyond  the  control  of  human 
beings.  Suggestions  for  the  reduction  and  prevention  of 
unemployment  include:  (1)  the  promotion  of  industrial 
education  to  equip  workers  with  a  degree  of  skill  that  will 
increase  their  efficiency  and  stabilize  employment;  (2) 
stricter  regulation  of  immigration  for  the  purpose  of 
effecting  an  approximate  equilibration  between  the  influx 
of  immigrants  and  the  demand  for  labor;  (3)  organized, 
systematic  dovetailing  of  seasonal  industries  in  order  to 
give  the  workers  in  these  trades  subsidiary  occupations 
during  slack  seasons;  (4)  regularization  of  industry  by 
standardizing  products  and  coordinating  production  and 
sales  departments,  with  a  view  to  furnishing  employment 
the  year  round;  (5)  systematic  adjustment  and  distribu- 
tion of  public  work  in  order  to  absorb  surplus  labor  in 
dull  seasons  and  periods  of  excessive  unemployment;  (6) 
rigid  regulation  or  the  abolition  of  private  employment 
agencies;  (7)  establishment  of  an  adequate  system  of 
public  employment  exchanges  for  the  effective  placement 
of  labor;  (8)  unemployment  relief  or  charity;  (9)  more 
conservative  regulation  of  credit;  and  (10)  unemployment 
insurance.  Discussion  of  unemployment  insurance  is  post- 
poned until  a  later  chapter.13 

1.  Industrial  Education  and  Training. — Adequate  pro- 
vision for  vocational  education  and  trade  training  will  do 
much  to  eliminate  the  lack  of  industrial  adaptability  on 
the  part  of  a  large  number  of  workers  who  at  present 
enter  industry  without  any  technical  preparation  and  get 
very  little  that  is  worth  while  after  they  enter.  The 
absence  of  skill  keeps  hundreds  of  thousands  of  men  and 
women  in  the  underemployed  and  irregularly  employed 
classes  and  forces  them  into  idleness  for  extended  periods 
during  business  depressions.  In  years  of  acute  unemploy- 

a  See  Chap.  XXVI. 


Unemployment  285 

ment  as  well  as  in  months  of  seasonal  depression,  the 
United  States  can  do  a  remarkably  constructive  work  in 
improving  the  quality  of  her  labor  supply  by  providing 
classes  in  industrial  training  for  the  unemployed. 

2.  Regulation  of  Immigration. — The  immigration  policy 
of  the  United  States  has  been  planned  with  little  or  no 
regard  for  the  necessity  of  adjusting  the  influx  of  aliens 
to  the  industrial  needs  of  the  country.  Literacy  tests  and 
nationality  percentage  quotas  keep  out  no  greater  number 
of  persons  in  periods  of  severe  depression  than  in  years  of 
great  industrial  activity  and  business  expansion.     There 
is  sound  judgment  back  of  the  demand  of  American  labor 
for  the  complete  exclusion  of  immigrants  in  periods  ,of 
unemployment  when  the  labor  supply  is  excessive.     If 
this  policy  were  supplemented  by  a  careful  selection  on 
the   basis   of  industrial  needs  in  periods   of  industrial 
activity  so  that  immigrants  would  enter  those  industries 
in  which  the  demand  for  labor  exceeded  the  supply,  the 
interests  of  American  employers  would  be  safeguarded 
and  the  American  workingmen's  standard  of  living  would 
be  protected.  Thus  far  sentiment  and  the  political  influence 
of  employers  and  foreign-born  citizens  have  prevented  a 
rational  policy  of  this  kind,  with  the  result  that  in  years 
of  acute   unemployment,  such   as   1920-1922,   American 
workers  have  suffered  on  account  of  the  flood  of  new 
immigrants  into  an  already  depressed  labor  market. 

3.  Systematic  Dovetailing  of  Seasonal  Industries. — Cer- 
tain industries  and  occupations  have  their  highest  peaks 
of  activity  in  winter,  while  others  have  their  maximum  in 
summer.     The  dovetailing  of  these  summer  and  winter 
industries  is  practicable  within  certain  limits,  and  pro- 
vides regular  employment  for  the  workers.    In  the  large 
cities  of  the  United  States  it  is  a  common  practice  for 
the  same  companies  to  sell  coal  and  ice,  their  employees 
being  kept  busy  in  all  seasons.    Another  example  of  dove- 
tailing is  found  in  the  location  of  canning  factories  in 
rural  communities  where  the  workers  are  employed  alter- 
nately in  agricultural  pursuits  and  in  factories. 

4.  Regularization  of  Industry. — Manufacturers  are  able 


236  Unemployment 

to  relieve  the  unemployment  situation  by  part-time  work, 
through  the  rotation  of  jobs;  manufacturing  for  stock; 
plant  construction,  repairs,  and  general  improvements  and 
readjustments ;  reduction  of  the  number  of  hours  of  labor 
per  day;  coordination  of  the  departmental  activities;  im- 
proving sales  methods;  seeking  more  diversified  markets 
and  increasing  the  variety  of  products;  stabilizing  the 
trade ;  and  standardizing  products.  Special  discounts  are 
offered  to  customers  who  purchase  their  stock  out  of 
season.  Many  companies  concentrate  production  on  those 
goods  which  are  most  in  demand,  shifting  their  force  from 
the  manufacture  of  one  class  of  goods  to  another.  In 
periods  of  inactive  demand  manufacturers  are  able  to 
produce  standard  products  for  stock,  the  surplus  being 
stored.  Standardization  of  styles  and  products  can  be 
promoted  by  cooperation  of  manufacturers  and  con- 
sumers. In  their  eagerness  to  capture  as  large  as  possible 
a  share  of  an  active  market,  employers  make  plant  im- 
provements and  extensions  during  prosperous  times  when 
labor  is  scarce  and  expensive.  Employment  could  be 
steadied  if  these  activities  were  postponed  until  years  of 
slow  production.  This  would  result  in  a  lower  cost  to  the 
producer  because  of  the  labor  surplus  and  lower  wage 
scales. 

Prominent  among  the  concerns  that  have  adopted  a 
systematic  plan  for  the  prevention  and  relief  of  unem- 
ployment is  the  Dennison  Manufacturing  Company, 
Framingham,  Massachusetts.  This  company  started  as 
a  manufacturer  of  Christmas  trinkets,  its  busy  season 
beginning  in  September,  when  retailers  ordered  their 
goods,  and  ending  with  three  or  four  months  of  concen- 
trated production  and  overwork.  By  the  application  of 
certain  clearly  defined  principles  the  company  has  reduced 
seasonal  employment.  (1)  Seasonal  orders  are  reduced 
by  getting  customers  to  order  at  least  a  minimum  quantity 
of  goods  well  in  advance  of  the  season.  This  is  accom- 
plished by  merely  asking  for  business,  by  persuasive  sales- 
manship, and  by  promising  greater  security  as  to  delivery. 


Unemployment  237 

(2)  The  proportion  of  nonseasonal  orders  is  increased. 
Effective  selling  secures  "hold  orders"  which  are  not  to 
be  delivered  until  a  certain  date,  and  orders  to  be  deliv- 
ered when  ready.  (3)  All  stock  items  are  planned  more 
than  a  year  in  advance.  On  the  basis  of  the  previous 
year's  sales  the  warehousing  department  ascertains  a  year 
in  advance  just  what  amount  of  stock  items  will  be  re- 
quired, a  fact  which  makes  possible  proper  distribution 
of  production  and  assures  a  steady  flow  of  commodi- 
ties to  customers.  (4)  Departmental  needs  are  planned 
well  in  advance.  This  assures  the  necessary  amount  of 
raw  materials  and  other  prerequisites  when  needed,  and 
prevents  a  slowing  down  in  production  with  its  loss  of 
time  to  the  workers  and  money  to  the  company.  (5)  The 
building  up  of  "out-of-season"  items  and  varying  the 
lines  of  production  in  order  to  balance  one  demand 
against  another  are  encouraged.  New  paper  box  items 
not  used  for  holiday  purposes  are  developed,  and  staple 
articles  are  made  for  stock.  This  levels  production  and 
steadies  employment. 

In  addition  to  these  methods  of  decreasing  the  pressure 
of  seasonal  demands  other  adjustments  are  applied  by  the 
company,  such  as  the  balancing  of  decreased  production 
in  one  department  against  the  surplus  in  another.  Trans- 
ferring workers  from  the  inactive  to  the  active  depart- 
ments assures  them  of  employment  and  makes  them  more 
generally  proficient.  In  order  to  meet  any  contingencies 
of  unemployment  that  get  beyond  the  control  of  the  com- 
pany, unemployment  relief  is  provided  in  the  form  of  an 
unemployment  fund,  set  aside  by  the  directors  out  of 
profits  and  accumulated  over  a  period  of  five  years.  This 
is  not  a  form  of  charity;  the  fund  is  administered  by  a 
joint  committee  representing  the  company  and  the  work- 
ers. The  company's  efforts  have  been  unusually  success- 
ful. The  number  of  employees  increased  sfeadily  from 
1,840  in  January,  1916,  to  2,650  in  January,  1922,  the  firm 
passing  successfully  through  the  period  of  acute  unem- 
ployment of  the  years  1920-1922.  The  president  of  the 


288  Unemployment 

company  attributes  the  achievement  to  improvements  in 
management  and  in  the  morale  of  the  workers." 

5.  Systematic  Adjustment  and  Distribution  of  Public 
Work. — Public  work  is  better  than  charity.  It  is  necessary 
to  make  a  distinction  between  public  works  planned 
merely  as  "relief"  to  idle  workers,  and  the  well-planned 
program  of  public  improvements  which  extends  over  a 
period  of  years.  The  expenditure  of  public  funds  for 
work  that  is  not  necessary  is  an  unjustifiable  waste,  but 
the  creation  of  a  special  fund  to  provide  public  work  in 
periods  of  unemployment  is  a  social  responsibility  of  first 
importance.  Unfortunately,  many  communities  sanction 
public  improvements  in  periods  of  prosperity  when 
sources  of  revenue  are  tapped  more  readily,  and  fail  to 
undertake  these  projects  in  periods  of  depression  when 
taxpayers  feel  "poor."  This  is  an  economically  wasteful 
policy  because  governments  take  men  out  of  private  in- 
dustries when  they  are  most  needed  there,  and  fail  to 
absorb  the  labor  surplus  when  millions  of  workers  are 
released  by  private  concerns  on  account  of  business  de- 
pression. 

That  the  provision  of  public  construction  in  dull  periods 
is  possible  may  be  seen  from  the  funds  that  have  been 
made  available.  Hundreds  of  millions  of  dollars  worth 
of  bonds  have  been  sold  by  state  governments  during 
recent  years  for  the  purpose  of  providing  road  construc- 
tion, several  states  making  bond  issues  of  from  $40,000,000 
to  $70,000,000  for  this  purpose  alone.  'In  1921  over 
$700,000,000  of  municipal  bonds  were  sold,  the  largest 
amount  in  the  history  of  the  nation.  These,  together  with 
federal  appropriations  for  reclamation  projects,  could 
have  provided  employment  for  hundreds  of  thousands  of 
workers,  yet  comparatively  little  was  done  either  by  the 
states  or  federal  government. 

A  few  states  and  a  number  of  cities  have  carried 
out  a  definite  program  of  public  construction  in  recent 

"For  a  fuller  account  of  this  plan  see  the  American  Labor  Legis- 
lation Review,  Vol.  XI,  No.  1,  March,  1921,  pp.  53-58;  and  Factory, 
January,  1922,  pp.  48,  49. 


Unemployment  239 

periods  of  unemployment.  Communities  appear  to  have 
maintained  the  same  standards  of  wages,  hours,  and  effi- 
ciency as  are  required  for  regular  work  performed  for 
them.  Rotation  of  workers  has  been  introduced  in  such 
periods,  workers  being  employed  one  week  and  laid  off  the 
next,  or  working  in  gangs  for  three  days  followed  by  a 
three-day  lay-off.  Preference  is  given  to  married  men  with 
dependents  who  are  local  residents,  and  in  a  few  cases 
American  citizenship  has  been  a  qualification.  Cities  are 
crippled  in  these  activities  by  charter  limitations  on  their 
borrowing  power.  The  state  of  California  made  a  com- 
mendable step  in  1921,  when  its  legislature  enacted  a  law 
providing  for  "the  extension  of  public  works  of  the  state 
.  .  .  during  periods  of  extraordinary  unemployment 
caused  by  temporary  industrial  depression."  The  provi- 
sion of  similar  precautionary  measures  by  other  states 
and  municipalities  is  necessary  in  the  interests  of  social 
welfare  and  for  the  maintenance  of  the  self-respect  of 
the  workers  who  are  jobless  through  no  fault  of  their 
own. 

6.  Regulation  of  Private  Employment  Agencies. — No  in- 
telligent plan  of  unemployment  relief  can  be  administered 
apart  from  systematic  organization  of  the  labor  market. 
Employment  offices  cannot  create  jobs,  but  they  can  be 
so  organized  as  to  eliminate  the  waste  of  time  and  money 
spent  by  the  workers  in  passing  from  one  job  to  another. 
Attempts  to  bring  the  manless  job  and  the  jobless  man 
together  are  made  by  several  types  of  employment 
services:  (1)  private  employment  offices  which  operate  for 
profit  and  charge  a  fee  for  the  service  rendered  to  tho 
workers;  (2)  religious  or  charitable  organizations  such  as 
the  associated  charities,  which  furnish  certain  kinds  of 
employment  free;  (3)  trade  unions  which  register  unem- 
ployed members  at  headquarters  and  hold  the  business 
agent  responsible  for  finding  these  men  employment; 
(4)  employers'  associations  which  operate  employment 
bureaus  for  a  given  trade  or  district ;  (5)  public  employ- 
ment exchanges  in  which  unemployed  persons  register 
and  receive  assistance  at  the  expense  of  the  government. 


240  Unemployment 

The  main  purpose  of  employment  departments  operated 
by  charitable  organizations  is  to  provide  work  for  the 
unemployed  who  are  unable  to  fill  ordinary  positions,  and 
for  casual  and  migratory  laborers.  Employers  and  normal 
workers  make  very  little  use  of  these  agencies.  Trade 
union  employment  offices  are  usually  operated  for  the 
particular  members  of  the  trade;  unorganized  and  un- 
skilled workers  find  no  help  in  these  schemes.  Employ- 
ment bureaus  established  by  employers'  associations  are 
almost  invariably  run  to  introduce  and  maintain  the  so- 
called  "open  shop"  or  "antiunion  shop,"  although  they 
sometimes  represent  an  honest  endeavor  to  furnish  an 
efficient  medium  for  bringing  the  man  and  the  job  to- 
gether. 

The  private  fee-charging  employment  office,  which  is 
the  most  prominent  agency  for  the  recruitment  of  labor, 
has  been  almost  universally  condemned  by  students  of 
industrial  problems.  This  institution  is  an  improvement 
over  the  disorganized  conditions  that  exist  when  workers 
are  allowed  to  go  on  wild-goose  chases  in  response  to 
the  fake  advertisements  of  "help  wanted"  that  frequently 
take  up  so  much  space  in  metropolitan  and  town  dailies, 
or  the  false  tips  and  rumors  dropped  in  saloons  and  on 
street  corners.  But  it  is  an  institution  that  stands  con- 
demned from  practically  every  point  of  view  except  that 
of  the  unscrupulous  profiteer.  These  agencies  sell  jobs 
for  fees  collected  from  the  workers  or  the  employers, 
and  sometimes  from  both  for  the  same  job.  It  is  estimated 
that  there  are  from  3,000  to  5,000  of  these  establishments 
in  the  United  States,  the  number  varying  from  year  to 
year.  Their  chief  interest  is  in  profits  and,  therefore, 
in  fees  and  not  in  service.  Workers  are  shipped  to  over- 
crowded cities ;  vacancies  are  filled  with  workers  already 
employed  elsewhere,  because  in  this  way  new  vacancies 
are  created  and  new  sources  of  fees  are  tapped;  the 
charges  for  jobs  are  such  that  men  are  deprived  of  in- 
formation about  work  when  they  need  it  most,  the  fee 
being  as  low  as  25  cents  in  the  summer  when  employment 


Unemployment  241 

is  abundant,  and  ranging  from  $2  to  $10  for  common  jobs 
in  periods  of  unemployment. 

Fraudulent  and  extortionate  practices  are  common 
among  private  fee-charging  agencies.  There  is  frequent 
misrepresentation  of  terms  and  conditions  of  employment, 
such  as  promises  of  higher  wages  than  are  actually  paid, 
of  desfrable  working  and  living  conditions  when  in  fact 
no  such  pleasant  conditions  are  provided,  and  of  free 
transportation  when  these  charges  are  not  made  good  by; 
the  employer.  Men  are  not  informed  of  strikes,  lockouts, 
deductions  from  wages,  and  numerous  other  things  that 
detract  from  the  value  of  the  job.  Unemployed  men  are 
often  sent  long  distances,  made  to  pay  fees  and  transpor- 
tation, only  to  discover  upon  arrival  that  no  employer 
in  that  locality  has  ordered  men  from  the  employment 
office.  Then  there  is  the  despicable  practice  of  "splitting 
fees"  with  foremen  and  superintendents.  These  execu- 
tives agree  to  employ  the  men  from  a  certain  agency,  in 
return  for  which  they  receive  from  one-fourth  to  one-half 
of  every  fee  collected,  so  that  it  becomes  profitable  to 
discharge  men  in  order  to  secure  fees  from  those  who  are 
hired  to  fill  the  vacancies.  Under  this  practice  the  "three- 
gang  method"  is  often  found  on  railroad  and  construc- 
tion work;  one  gang  on  the  job,  another  going  to  the 
job,  and  still  another  coming  from  the  job.  Employers 
are  to  blame  when  they  order  men  from  several  agencies 
and  thus  keep  a  stream  of  applicants  coming  to  the  plant 
for  whom  they  have  no  work.  This  gluts  the  labor  market 
and  depresses  wages  and,  even  though  it  may  appear  to 
be  a  profitable  business  for  the  employer,  it  is,  neverthc- 
less,  a  flagrant  breach  of  the  lowest  standard  of  ethics. 

Efforts  have  been  made  to  protect  unemployed  workers 
against  the  numerous  evils  that  arise  under  the  system, 
of  private  fee-charging  employment  agencies.  The  ma- 
jority of  the  states  have  regulatory  legislation  which 
requires  the  deposit  of  a  bond  of  from  $100  to  $500  or 
the  payment  of  a  license  fee  of  from  $10  to  $100,  accord- 
ing to  the  size  of  the  city  in  which  the  agency  is  located. 
Among  other  requirements  are  the  location  of  employment 


Unemployment 

offices  on  respectable  premises,  the  return  of  the  fee  when 
no  employment  is  found,  and  the  keeping  of  records  that 
must  be  submitted  to  the  commissioner  of  labor.  Regula- 
tory legislation  has  not  been  successful  in  eliminating  the 
evils  that  appear  in  the  system,  and  the  movement  for 
public  employment  exchanges  has  been  widely  endorsed. 
Total  abolition  of  private  employment  agencies  is*  urged. 
In  support  of  this  demand  it  is  pointed  out  that  in  one 
state  alone — California — the  total  fees  paid  to  private 
employment  agents  amounted  to  $403,000  in  1912,  and 
that  on  the  basis  of  this  experience  the  total  amount  paid 
annually  by  the  workers  in  fees  is  about  $15,000,000,  a 
sum  that  is  paid  chiefly  out  of  the  meager  earnings  of 
domestic  servants,  clerks,  and  unskilled  laborers.  Such 
an  amount,  it  is  contended,  is  sufficient  to  maintain  a 
system  of  public  employment  exchanges  with  immeasur- 
able benefit  to  workers  and  employers.15 

7.  Public  Employment  Exchanges. — Considerable  prog- 
ress has  been  made  in  the  United  States  towards 
establishing  a  system  of  national,  state,  and  local  public 
employment  offices.  Ohio,  which  passed  a  law  in  1890, 
was  the  first  state  to  provide  a  public  employment  service. 
Montana  followed  in  1895,  and  New  York  in  1896,  but 
these  statutes  were  repealed  later.16  Within  the  next  two 
decades  twenty-five  states  and  about  fifteen  cities  es- 
tablished and  operated  nearly  one  hundred  employment 
exchanges.  Insufficient  approprations  have  crippled  the 
work  of  these  agencies,  and  employers  have  often  opposed 
them.  The  opposition  of  employers  has  diminished  where 
the  law  provides  boards  of  control  consisting  of  repre- 
sentatives of  employers,  employees,  and  the  public.  The 
failure  to  advance  transportation  money  and  to  establish 
a  central  clearing  house  of  information  has  also  impeded 
activities.  Often  the  law  restricts  operation  of  such  offices 
to  large  cities,  and  this  has  deprived  smaller  communities 
of  a  much-needed  service.  The  Illinois  public  employ- 

UU.  S.  Commission  on  Industrial  Eelations,  Final  Eeport,  1916, 
p.  110. 

*•  Commons  and  Andrews,  Principles  of  Labor  Legislation,  1920 
ed.,  p.  297. 


Unemployment  243 

ment  service  was  improved  in  1921  by  a  law  which  pro- 
vided for  the  establishment  of  exchanges  in  towns  as  well 
as  in  cities,  the  population  requirement  being  reduced 
from  50,000  to  25,000,  and  made  possible  the  •stablishment 
of  four  instead  of  three  branch  offices  in  connection  with 
the  central  offices  in  cities  whose  population  is  one  million 
or  over.  One  of  the  chief  objections  to  some  state  em- 
ployment systems  is  that  the  offices  are  manned  by, 
political  appointees  who  are  not  particularly  fitted  for  the 
work. 

The  United  States  Employment  Service  began  in  1907, 
as  an  attempt  of  the  federal  government,  through  the 
Bureau  of  Immigration,  to  place  immigrant  labor  on  the 
farms.  For  ten  years  there  were  less  than(  one  hundred 
branches,  mere  desks  in  the  immigration  offices.  In  1915 
the  service  was  extended  to  include  all  occupations  and 
all  classes  of  labor.  Emergencies  incident  to  the  World 
War  forced  the  Secretary  of  Labor,  on  January  3,  1918, 
to  create  a  separate  employment  service.  Reorganization 
was  made  possible  by  a  grant  of  $2,000,000  from  the 
President's  emergency  fund.  The  service  was  directly 
under  the  control  of  the  Secretary  of  Labor.  State, 
county,  and  municipal  offices  throughout  the  nation  were 
coordinated  under  the  authority  of  the  United  States  Em- 
ployment Service,  but  did  not  lose  their  identity.  Federa- 
tion rather  than  consolidation  was  sought.  Several  divi- 
sions were  created,  and  to  aid  in  recruiting  labor  a  system 
of  state  advisory  committees,  community  boards,  and  state 
organization  committees  comprising  representatives  of 
employers,  employees,  and  the  federal  service  was  intro- 
duced.17 

An  idea  of  the  success  of  the  reorganized  federal  service 
may  be  gathered  from  the  fact  that  between  January, 
1918,  and  June,  1919,  the  service  received  calls  for  12,- 
104,184  workers;  registered  7,133,831;  referred  6,470,516 
to  positions;  and  reported  4,976,320  placements.  Ap- 

17  For  a  mnro  detailed  ilisi-ussion  of  the  reorganized  service  see 
the  author's  Labor  Problems  and  Labor  Administration  in  the  United 
States  During  the  World  War,  pp.  176-205. 


244  Unemployment 

proximately  10,000  persons  were  placed  each  working-day; 
for  the  eighteen-month  period,  without  any  charge  to 
the  workers  and  at  a  cost  to  the  nation  of  only  $1.34  per 
placement.  The  saving  in  fees  to  the  men  and  women 
placed  by  the  cooperative  efforts  of  federal,  state,  and 
municipal  offices  is  estimated  at  not  less  than  $10,000,000, 
while  many  more  millions  were  saved  in  hours  of  labor 
gained  by  minimizing  the  time  lost  on  the  part  of  workers 
between  jobs,  and  in  reducing  labor  turnover. 

All  kinds  of  workers  were  directed  to  positions  by  the 
service,  from  common  laborers  and  domestic  servants  to 
high-salaried  professional  and  technical  experts.  It  was 
not  uncommon  for  a  $1,800  examiner  to  place  a  $15,000 
engineer  or  executive.  "Women  constituted  20  per  cent 
of  all  the  workers  placed,  many  of  them  finding  desirable 
positions  in  industry,  commerce,  and  the  professions. 
College-trained  women  in  large  numbers  were  placed  by 
the  cooperation  of  the  service  with  alumnae  associations. 
Of  the  almost  five  million  placements,  common  labor  con- 
stituted only  23  per  cent ;  the  remaining  76  per  cent  com- 
prised skilled  workers  and  other  persons  engaged  in  speci- 
fied occupations.  It  is  interesting  to  note  that  in  deter- 
mining the  average  cost  of  $1.34  per  placement,  all  the 
cost  of  building  up  and  equipping  the  service  was  in- 
cluded, items  which  in  the  financing  of  private  corpora- 
tions would  be  considered  permanent  investments  not 
chargeable  to  operation.18 

About  one  thousand  branch  offices  with  a  personnel  of 
6,000  were  planned  for  the  fiscal  year  1919-1920,  and  an 
appropriation  of  $4,634,000  was  asked  for  this  purpose, 
but  Congress  granted  only  $400,000.  It  was  contemplated 
to  reduce  the  organization  of  the  service  to  a  skeleton 
beginning  March  22,  1919,  but  generous  financial  assis- 
tance from  state,  municipal,  and  community  organizations 
helped  to  maintain  the  enlarged  service  for  several 
months.  In  the  autumn  of  1919  the  service  was  again 
limited  to  the  function  of  giving  out  information  to  local 

"Seventh  Annual  Eeport  of  the  Secretary  of  Labor,  1919,  pp. 
292,  293. 


Unemployment  245 

public  employment  offices.  'As  far  as  funds  would  permit, 
the  service  continued  to  coordinate  the  work  of  employ- 
ment offices  in  the  twenty-five  states  and  fifteen  munici- 
palities having  such  public  agencies,  and  to  make  monthly 
unemployment  surveys,  but  the  lack  of  appropriations 
destroyed  the  effectiveness  of  the  federal  service  in  the 
critical  unemployment  period  of  1920-1922.  Moreover, 
several  states  reduced  the  number  of  public  labor  ex- 
changes in  the  same  period  because  of  lack  of  funds.  Con- 
siderable pressure  was  used  by  selfish  employers  having 
great  political  influence  to  destroy  the  reorganized  federal 
service  because  it  interfered  with  the  activities  of  cor- 
poration employment  bureaus.  The  United  States  must 
eventually  establish  a  comprehensive  federal  employment 
service  whose  activities  will  be  coordinated  with  the  public 
offices  of  the  various  states  and  municipalities,  thus  mak- 
ing private  agencies  unnecessary.  The  President's  Con- 
ference on  Unemployment  which  met  in  the  fall  of  1921, 
and  numerous  other  bodies  have  recommended  the  exten- 
sion of  the  service. 

Great  Britain  was  the  first  European  nation  to  create 
a  coordinated  national  system  of  labor  exchanges,  having 
taken  this  step  under  the  provisions  of  the  Labor  Ex- 
changes Act  of  1909,  which  authorized  the  Board  of  Trade 
to  establish  employment  exchanges  throughout  the  United 
Kingdom.  The  whole  kingdom  was  divided  into  districts, 
each  being  supervised  by  a  divisional  director.  There 
are  six  districts  for  England  and  Scotland,  one  for  Wales, 
and  one  for  Ireland,  and  during  the  World  War  many 
regional  clearing  houses  were  created.  Exchanges  aro 
found  in  every  important  town  of  the  division,  and  they 
are  in  telephonic  communication  with  each  other  and  with 
the  central  office  in  London.  In  1917  the  newly  created 
Ministry  of  Labor  assumed  charge  of  the  system.  Ad- 
visory committees,  consisting  of  an  equal  number  of  em- 
ployers and  employees  and  other  persons  nominated  by 
the  Ministry  of  Labor  to  represent  various  additional  in- 
terests, are  appointed  to  aid  in  the  administration  of  ono 
or  more  exchanges. 


246  Unemployment 

Under  the  British  system  loans  are  granted  to  workers 
to  enable  them  to  travel  to  localities  where  employment 
has  been  found  for  them  through  an  exchange.  Persons 
not  insured  under  the  unemployment  insurance  act  are 
required  to  repay  these  advances  in  full,  while  insured 
persons  repay  only  a  certain  percentage.  During  1920 
more  than  19,000  railway  tickets  were  issued  to  work- 
people at  a  cost  of  more  than  $75,000 ;  in  1921  over  8,000 
tickets  were  issued  at  a  cost  of  more  than  $30,000,  two- 
thirds  of  which  was  repayable  to  the  government.  Trans- 
portation expenses  are  not  advanced  unless  the  distance 
to  the  job  is  more  than  five  miles,  nor  to  plants  where 
a  strike  is  in  progress  or  where  the  wage  scale  is  below 
the  current  rate. 

Applicants  are  not  discriminated  against  or  refused 
further  assistance  if  they  decline  employment  in  an  es- 
tablishment where  there  is  a  trade  dispute  or  where  the 
wages  offered  are  less  than  the  scale  prevailing  in  the 
locality  for  the  same  kind  of  work.  The  total  number 
of  persons  on  the  "live  registers"  of  British  employment 
exchanges  on  December  30,  1921,  was  1,886,000,  of  whom 
1,451,000  were  men,  334,000  were  women,  and  the 
remainder  boys  and  girls.  There  are  special  advisory  com- 
mittees for  juvenile  applicants  that  direct  them  into 
proper  employment  and  cooperate  with  the  school  authori- 
ties in  the  work  of  vocational  guidance  for  youthful 
workers.  The  total  number  of  registrations,  including  re- 
registration  of  the  same  individuals,  between  1910  and 
1921  inclusive,  was  over  37,000,000,  or  a  yearly  average 
of  about  3,083,000.  During  the  same  period  the  total 
number  of  vacancies  reported  by  employers  was  13,680,- 
446,  or  an  average  of  about  1,140,000,  while  the  total 
number  of  vacancies  filled  was  more  than  10,000,000,  or 
a  yearly  average  of  about  833,000.  In  one  year  alone — 
1921 — the  number  of  registrations  was  more  than  9,000,- 
000,  while  over  1,000,000  vacancies  were  reported  and 
about  842,000  vacancies  filled. 

Other  European  countries  have  not  taken  such  an  ad- 
vanced step  as  Great  Britain,  but  some  provisions  have 


Unemployment  247 

been  made  for  the  distribution  of  the  labor  supply.  Pub- 
lic employment  bureaus  are  subsidized  by  the  central 
government  in  several  countries.  Germany,  which  has 
several  hundred  such  bureaus,  has  attempted  to  coor- 
dinate and  unify  these  offices  through  a  central  employ- 
ment bureau.  In  1913  Denmark  created  a  system  of  state 
subsidized  offices  with  centralized  supervision.  Subven- 
tions had  been  granted  recognized  offices  for  several  years 
before  that  (since  1907).  In  December,  1921,  an  act  was 
passed  which  provides  for  the  coordination  of  unemploy- 
ment societies,  employment  exchanges,  and  emergency 
works  under  a  single  official  called  the  director  of  labor. 
Unemployment  insurance  is  also  provided,  but  benefits 
are  not  paid  to  workers  who  refuse  to  accept  employment 
offered  them  because  the  wage  is  below  their  previous 
wages,  provided  that  the  wage  is  not  lower  than  that 
usually  paid  in  the  industry  and  district  for  similar  work. 
This  act  became  effective  January,  1922. 

8.  Unemployment  Relief. — Charity,  as  a  means  of  reliev- 
ing the  suffering  caused  by  unemployment,  is  universally 
condemned  except  in  special  cases.     Bread  lines,  soup 
kitchens,  and  unemployment  doles  of  any  kind  are  to  be 
discouraged,   since  indiscriminate   giving  to  able-bodied 
persons    has    deleterious    effects    upon    individuals    and 
society.    Municipal  lodging  houses  are  often  provided  for 
single  men,  but  a  certain  amount  of  work  is  required  of 
every  individual  who  is  thus  aided.    Odd  jobs  and  work- 
shops are  means  of  caring  for  unemployed  persons  when 
no  other  sources  of  work  are  available.     Workers  want 
employment,  not  charity. 

9.  More  Conservative  Regulation  of  Credit. — If,  as  is 
often  contended,  overexpansion  of  credit  is  the  basic  cause 
of  business  cycles  and  fluctuations  of  employment,  it  is 
necessary  that  a  more  conservative  policy  of  credit  exten- 
sion be  introduced.     Obviously,  this  step  depends  upon 
the  banks.    In  periods  of  industrial  activity  when  business 
men  ask  for  large  amounts  of  credit  to  provide  extensions 
necessary  in  order  to  get  a  full  share  of  the  abnormal 
market,  artificial  limitations  must  be  imposed  on  borrow- 


248  Unemployment 

ing.  In  the  absence  of  such  restriction  enterprisers  will 
expand  their  business  beyond  the  requirements  of  normal 
demand  and  bankruptcy  or  curtailed  production  is  in- 
evitable. The  Federal  Reserve  System  can  be  used  effect- 
ively as  a  regulator  of  credit.  In  periods  of  business 
activity  interest  rates  can  be  increased  to  a  point  that 
will  discourage  excessive  borrowing,  and  in  periods  of 
slow  demand  rates  can  be  reduced  to  encourage  recupera- 
tion of  production. 

Conclusions. — The  only  cure  for  unemployment  is  em- 
ployment, and  it  is  necessary  to  eliminate  the  causes  that 
rproduce  seasonal  variations  and  periodical  business  de- 
pressions in  order  to  stabilize  production  and  work.  The 
various  methods  of  relief  are  palliatives,  not  remedies. 
Unemployment  is  at  the  bottom  of  much  of  our  economic 
and  social  waste,  and  it  is  socially  expedient  that  an 
earnest  effort  be  made  to  solve  this  greatest  of  all  indus- 
trail  problems.  In  the  words  of  the  Secretary  of  Com- 
merce: "There  is  no  economic  failure  so  terrible  in  its 
import  as  that  of  a  country  possessing  a  surplus  of  every 
necessity  of  life  in  which  numbers,  willing  and  anxious 
to  work,  are  deprived  of  these  necessities.  It  simply  can- 
not be  if  our  moral  and  economic  system  is  to  survive." 19 

SELECTED  REFERENCES 

AMERICAN  LABOR  LEGISLATION  REVIEW,  Vol.  V,  No.  2,  June, 
1915;  Vol.  X,  No.  4,  Dec.,  1920;  Vol.  XI,  No.  3,  Sept.,  1921; 
Vol.  XII,  No.  1,  March,  1922. 

AMERICAN  FEDERATIONIST,  Jan.,  1922,  pp.  13-28. 

BEVERIDGE,  W.  H.,  Unemployment :  A  Problem  of  Industry,  1909. 

CARLTON,  F.  T.,  The  History  and  Problems  of  Organized  Labor, 
revised  edition,  1920,  Chap.  XVII. 

CARVER,  T.  N.,  Idleness  as  a  Source  of  Waste,  Foundations  of 
National  Prosperity,  1917,  Part  IV,  Chap.  III. 

COMMONS,  J.  R.,  AND  ANDREWS,  J.  B.,  Principles  of  Labor  Legis- 
lation, revised  edition,  1920,  Chaps.  VI  and  VIII. 

COMMONS,  J.  R.  (editor),  Trade  Unionism  and  Labor  Problems, 
second  edition,  1921,  Part  I,  Chap.  IV. 

18  Herbert   Hoover,   before   the   President  'B   Conference   on   Unem- 
ployment at  Washington,  D.  C.,  September  26,  1921, 


Unemployment  249 

DEVINE,  E.  T.,  Misery  and  Its  Causes,  1913. 

HART,  H.  H.,  Fluctuations  in  Unemployment  in  Cities  of  the 

United  States,  1902  to  1917.    1918. 
HOBSON,  J.  A.,  The  Problem  of  the  Unemployed,  1896. 
HOBSON,   J.   A.,   The  Industrial  System,  revised  edition,   1910, 

Chap.  XVIII. 

KELLOR,  F.  A.,  Out  of  Work:  A  Study  of  Unemployment,  1915. 
LAUCK,  W.  J.,  AND  SYDENSTRICKER,  EDGAR,  Conditions  of  Labor 

in  American  Industries,  1917,  Chaps.  Ill  and  IV. 
LESCOHIER,  D.  D.,  The  Labor  Market,  1919. 
NATIONAL  INDUSTRIAL  CONFERENCE  BOARD,  NEW  YORK  CITY,  The 

Unemployment  Problem,  1921. 
SOLENBERGER,  ALICE,  One  Thousand  Homeless  Men,  1911,  Chaps 

IV-VI,  X-XII. 
SURVEY  ASSOCIATES,  How  to  Meet  Hard   Times,   The   Survey, 

45:1-15,  Feb.  5,  1921. 
TEAD,  ORDWAY,  AND  METCALF,  H.  C.,  Personnel  Administration, 

1920,  Chap.  XXVII. 
UNITED  STATES  BUREAU  OF  LABOR  STATISTICS,  Bulletin  195,  1916 ; 

Bulletin  183,  1915. 
UNITED  STATES  COMMISSION  ON  INDUSTRIAL  RELATIONS,  Final 

Report,  1916,  pp.  35-38,  102-115. 
UNITED  STATES  GOVERNMENT  PRINTING  OFFICE,  Report  of  the 

President's  Conference  on  Unemployment.     1921. 
UNITED  STATES  INDUSTRIAL  COMMISSION,  Reports,  1902,  19:746- 

763. 
WEBB,  SIDNEY,  AND  WEBB,  BEATRICE,  Industrial  Democracy,  1920, 

revised  edition,  Part  II,  Chap.  IX. 


LABOR  TURNOVER 

Definition. — Labor  turnover  is  the  change  in  the  indus- 
trial personnel  of  a  given  establishment  resulting  from 
the  hiring  and  termination  of  employment.  It  refers  to 
the  total  number  of  laborers  employed  by  a  plant  in  a 
given  period  to  take  the  place  of  employees  who  for  one 
reason  or  another  have  severed  their  connections  with  the 
company.  This  process  of  shifting  in  an  organization's 
working  force  includes  all  quits,  discharges,  and  lay-offs. 

As  a  problem,  labor  turnover  has  attracted  wide  atten- 
tion in  the  United  States  and  Europe  only  within  the  last 
few  years.  Employment  managers  and  others  intimately 
associated  with  labor  difficulties  have  finally  recognized 
the  serious  implications  of  an  unnecessary  flux  in  the 
labor  force.  Excessive  hiring  and  firing  is  now  viewed 
as  bad  industrial  practice,  conducing  to  industrial  ineffi- 
ciency and  demoralization  of  the  nation's  labor  supply. 
A  certain  amount  of  labor  turnover  is  inevitable.  Thou- 
sands of  workers  leave  their  jobs  because  of  chronic  ill- 
ness, accident,  death,  the  acceptance  of  better  positions 
elsewhere,  starting  in  business  for  themselves,  emigration, 
or  some  other  reason.  The  serious  aspects  of  the  problem 
develop  from  unscientific,  careless,  and  autocratic  policies 
and  methods  of  hiring,  placement,  and  discharge. 

The  Extent  of  Labor  Turnover. — The  problem  of  unem- 
ployment, which  was  discussed  in  the  preceding  chapter, 
is  aggravated  by  the  unsteadiness  of  employment  caused 
by  deficiencies  in  the  administration  of  industrial  per- 
sonnel. The  extent  of  labor  turnover  in  American  indus- 
tries cannot  be  stated  exactly,  because  complete  statistical 
evidence  is  not  available.  Sufficient  information  exists, 
however,  to  make  clear  the  magnitude  of  the  problem. 

250 


Labor  Turnover  251 

A  labor  turnover  of  300  per  cent  per  annum  is  common 
in  normal  times  for  many  enterprises.  This  means  that 
for  every  job  to  be  filled  three  workers  have  to  be  hired 
within  a  year.  The  total  working  force  of  the  United 
States  is  over  42,000,000,  about  31,000,000  of  whom  may 
be  classified  as  employees.  A  turnover  of  300  per  cent 
would  mean  that  there  are  over  ninety  million  vacancies 
in  American  industries  annually.  Specific  examples  of 
labor  turnover  support  these  general  estimates.  An  in- 
vestigation of  the  cloak  and  suit  industry  in  New  York 
showed  that  4,000  workers  had  been  hired  to  maintain 
an  average  working  force  of  1,952  in  certain  occupations 
for  the  year ;  more  than  a  complete  turnover  of  the  force. 
A  large  steel  plant  employing  about  15,000  men  hired 
an  equal  number  to  maintain  the  force,  while  an  auto- 
mobile company  hired,  in  1912,  21,000  employees  to  main- 
tain an  operating  force  of  10,000.  From  October,  1912, 
to  October,  1913,  the  Ford  Motor  Company  hired  54,000 
men  to  keep  an  average  working  force  of  13,000,  which 
represented  a  labor  turnover  of  over  400  per  cent.  The 
labor  turnover  of  fifty-seven  Detroit  plants  in  1917  aver- 
aged 252  per  cent.1  During  Jhe  war  a  turnover  of  500 
per  cent  was  not  uncommon  in  some  industries,  and  in 
some  cases  the  abnormal  figure  of  1,000  per  cent  was 
reached. 

The  Nature  of  Separations. — Termination  of  employ- 
ment may  be  the  result  of  voluntary  quits,  discharges,  or 
lay-offs.  Numerous  studies  of  labor  turnover  suggest  that 
the  great  bulk — about  70  per  cent — of  all  separations 
from  employment  consists  of  voluntary  withdrawals. 
Generally  speaking,  periods  of  industrial  prosperity  aro 
characterized  by  a  relatively  low  percentage  of  lay-offs, 
while  periods  of  industrial  depression  are  characterized 
by  a  relatively  high  proportion  of  lay-offs  to  total  separa- 
tions. The  discharge  rate  is  subject  to  less  extreme  fluc- 
tuation than  the  lay-off  rate,  constituting  from  year  to 
year  a  fairly  consistent  proportion  of  the  total  separations 

1  Annals  of  the  American  Academy  of  Political  and  Social  Science, 
Vol.  LXV,  pp.  130,  144. 


252  Labor  Turnover 

from  employment.  In  periods  of  prosperity  the  workers 
enjoy  a  position  of  independence,  since  at  such  times 
labor  is  relatively  scarce  and  employment  is  not  difficult 
to  find.  Employers  bid  against  each  other  for  men,  and 
varying  wage  scales  cause  a  constant  shift  in  the  per- 
sonnel. On  the  other  hand,  in  periods  of  industrial  de- 
pression the  demand  for  labor  diminishes,  industries  shut 
down,  and  wholesale  discharge  of  men  ensues.  Thus  the 
rate  of  turnover  is  highly  sensitive  to  changing  conditions 
of  production. 

Computation  of  Labor  Turnover. — There  is  no  general 
agreement  on  methods  of  measuring  labor  turnover.  The 
percentage  of  labor  turnover  for  a  given  period  is  the 
ratio  of  the  total  number  of  employees  who  have  severed 
employment  relations  with  the  company  to  the  average 
number  on  the  employee  force  for  the  same  period.  At- 
tendance records  for  each  day  will  give  the  number  of 
employees  on  the  force.  To  compute  the  turnover  of  labor 
in  a  given  period,  then,  one  must  determine  the  number 
of  separations,  that  is,  the  number  of  persons  who  left 
the  employ  of  the  company,  and  divide  this  by  the  average 
number  working  each  dayv  If  the  annual  percentage  of 
turnover  is  desired  it  can  be  found  by  multiplying  by  the 
proper  factor. 

The  formula  would  be: 

o 

T  =  -,  with  S  =  separations,  and  F  =  average  working 
F 

force.  Specifically,  the  procedure  in  computation  might 
be  illustrated  as  follows: 

Total  separations  for  the  week  =  500 

Daily  working  force : 

Monday  =  1,000 

Tuesday  =  1,200 

Wednesday  =  900 

Thursday  =  900 

Friday  =  1,000 

Saturday  =  1,000 

6,000 


Labor  Turnover  253 

Dividing  by  6  gives  an  average  working  force  of  1,000 
for  the  week.  Then,  -fgfo  =  50  per  cent  per  week.  For 
the  year  : 

X  52  =  2600  per  cent. 


This  would  mean  merely  that  on  the  basis  of  the  specific 
week  for  which  the  turnover  was  computed  the  percentage 
of  turnover  for  the  year  would  be  2600  per  cent.  This, 
of  course,  would  be  an  abnormally  high  rate  of  turnover. 
To  secure  accurate  computation  for  the  year  it  would  be 
necessary  to  secure  the  data  for  each  working  week. 

The  obvious  objection  to  this  simple  method  of  measur- 
ing labor  turnover  is  that  it  indicates  nothing  as  to  the 
nature  of  separations.  All  separations  from  the  service 
of  the  company  may  be  generally  classified  into  "  avoid- 
able" and  "unavoidable,"  a  fact  which  has  led  some 
writers  to  revise  the  foregoing  formula  to  take  into  ac- 
count the  nature  of  separations.2  Whatever  formula  may 
be  adopted,  there  will  doubtless  always  be  a  great  many 
variations  in  its  use  owing  to  the  necessity  of  discovering 
the  major  and  minor  causes  of  turnover. 

Any  method  of  measurement  used  in  determining  labor 
turnover  for  the  plant  can  be  applied  in  discovering  the 
respective  rates  for  departmental,  occupational,  or  other 
subdivisions  of  the  employee  '  force  in  the  establishment. 
Similarly,  the  turnover  of  men  and  women  and  youthful 
employees  can  be  compared,  as  well  as  the  turnover  of 
respective  age  groups.  The  measurement  of  labor  turn- 
over aids  materially  in  discovering  the  causes  of  labor 
unrest  and  is  valuable  as  a  critical  examination  of  the 
labor  policies  applied  by  the  management. 

The  Causes  of  Labor  Turnover.  —  Many  of  the  causes  of 
labor  turnover  have  already  been  suggested  in  our  dis- 
cussion of  the  problem  of  unemployment.  No  general 
classification  of  these  causes  has  been  made  and  any  at- 
tempt here  must  be  regarded  as  more  or  less  incomplete, 
offered  in  the  spirit  of  suggestion  rather  than  of  dog- 
matic certainty. 

•Tead  and  Metcalf,  Personnel  Administration,  Chap.  XX. 


254 


Labor  Turnover 


The  nature  of  separations — voluntary  withdrawals,  dis- 
charges, lay-offs — has  sometimes  been  treated  as  the  causes 
of  labor  turnover.  This  is  an  unwarranted  confusion  of 
the  character  of  the  elements  in  labor  mobility  with  those 
far  more  fundamental  conditions  that  produce  it.  Volun- 
tary withdrawals,  discharges,  and  lay-offs  indicate  the 
nature  of  separations  from  the  plant's  service  in  a  given 
period,  but  tell  nothing  about  the  conditions  inside  or 
outside  the  plant  which  are  responsible  for  the  constant 
shift  in  the  labor  force. 

The  causes  of  labor  turnover  may  be  classified  roughly 
as  follows: 

(a)  Illness — including  constitu- 
tional weakness  of  the  worker 

(1)  Physiological  himself,  and  sickness  among 

members  of  his  family. 

(6)  Death. 


1.  Personal 


2.  Industrial 


3.  Social 


(2)  Psychological 


(1)  Deficiencies  in 
personnel  poli- 
cy and  indus-' 
trial  adminis- 
tration 


(2)  General  and  ex- 
ternal indus- 
trial conditions 


(a)  Migratory  habits  or  wander- 
lust. 

(6)  Uncongenial  disposition  or 
bad  temperament. 

(c)  Family  and  friendly  ties. 

(d)  Desire  for  personal  better- 
ment,   including   going  into 
business  for  oneself  or  chang- 
ing occupations. 

f  (a)  Poor   methods   of   selection 

and  placement. 

(6)  Lack  of  proper  or  adequate 
financial  and  nonfinancial 
incentives. 

(c)  Unfavorable    conditions    of 
work,  such  as  excessive  hours, 
lack  of  sanitation,  etc. 

(d)  Unregulated  production. 

(e)  .Autocratic  management. 

(a)  Changing    demands   of   the 

public . 
(6)  General  inequality  in  wage 

scales, 
(c)  Business  depression. 


(1)  Lack  of  transportation  facilities. 

(2)  Absence  of  adequate  means  of  communication, 
such  as  telephones,  newspapers,  etc. 

(3)  Inadequate  housing  facilities. 

(4)  Absence  of  recreational  opportunities. 


Labor  Turnover  255 

1.  Personal  Causes. — These  are  reflected  in  the  character- 
istics and  temperament  of  the  employee,  and  thus  have 
their  origin  within  the  individual.  Physical  character- 
istics are  always  a  factor  in  labor  turnover.  Death  of 
employees,  brief  or  prolonged  periods  of  illness,  voluntary 
withdrawals,  and  necessary  discharge  will  continue  as 
practically  uncontrollable  factors  in  separation  from 
service.  Employees  will  continue  to  seek  more  congenial 
climate  and  industrial  conditions  so  long  as  old  conditions 
conduce  to  the  ill-health  of  themselves  or  their  families. 
The  psychic  elements  include  the  mental  characteristics 
of  the  individual  employee.  By  virtue  of  temperament 
many  workers  are  migratory  and  restless,  possessing  an 
insatiable  wanderlust,  and  many  more  lack  the  ability 
to  cooperate  with  their  fellows.  These  "migrants"  or 
"casuals"  make  up  the  army  of  workers  who  reap  our 
harvests  in  the  summer  and  fall,  cut  our  ice  and  lumber 
in  the  winter,  and  make  possible  much  of  our  construction 
work  in  the  spring  and  summer.  The  roving  disposition 
of  sea-going  employees  is  a  large  factor  in  the  excessive 
labor  turnover  in  navigation. 

These  psychic  elements  have  a  peculiar  significance  in 
the  determination  of  excessive  labor  turnover  among 
juvenile  employees.  Temperamentally,  children  are  rest- 
less. Youth  is  optimistic,  confident,  and  indifferent  to 
the  consequences,  economic  and  social,  that  may  develop 
out  of  excessive  mobility.  A  change  of  jobs  is  looked 
upon  as  a  thing  good  in  itself,  strikes  are  welcomed  as  a 
means  of  furnishing  excitement  and  a  chance  to  loaf  or 
play,  and  the  least  margin  of  higher  wages  elsewhere 
is  sufficient  provocation  for  a  "move."  Regular  employ- 
ment is  viewed  as  monotonous.  The  Board  of  Education 
of  Rochester,  New  York,  discovered  that  boys  between 
the  ages  of  fourteen  and  sixteen  changed  employment  on 
the  average  every  seventeen  weeks,  which  indicates  a  turn- 
over of  300  per  cent.  Statistics  from  Indianapolis,  In- 
diana, indicate  that  of  6,710  positions  held  by  children 
on  leaving  school,  7  per  cent  were  for  less  time  than  two 
weeks;  15  per  cent  for  less  than  a  month ;  30  per  cent  for 


256  Labor  Turnover 

less  than  two  months ;  and  48  per  cent  for  less  than  three 
months. 

Another  element  that  enters  into  the  personal  causes  of 
labor  turnover  may  be  summed  up  in  the  phrase  "the 
desire  for  gain."  Laborers,  like  capitalists,  landlords, 
and  business  enterprisers,  are  constantly  seeking  the  level 
of  maximum  returns  on  the  investment.  The  laborer's 
investment  consists  of  his  labor-power,  and  he  will 
naturally  endeavor  to  command  the  highest  available  rate 
of  return.  This  explains  why  voluntary  quits  usually 
constitute  the  major  portion  of  separations  from  service. 
Then,  too,  there  is  a  constant  shifting  into  new  occupa- 
tions, including  farming. 

2.  Industrial  Causes. — Industrial  causes  of  labor  turn- 
over are  attributable  to  certain  deficiencies  in  the  organ- 
ization and  operation  of  industry.  Inefficient  employment 
policies  refer  to  the  very  unscientific,  haphazard  methods 
of  hiring  and  firing  that  have  prevailed  in  industry.  This 
important  duty  has  hitherto  been  placed  under  the  juris- 
diction of  the  foremen  who,  although  they  possess  a 
knowledge  of  technical  processes,  have  not  been  competent 
in  the  art  of  handling  human  nature.  Employment  depart- 
ments and  employment  managers  are  recent  additions  in 
most  industries.  The  absence  of  proper  incentives  refers 
to  poor  methods  of  transfer  and  promotion,  and  the  failure 
to  compensate  efficient  employees.  By  autocratic  super- 
intendence is  meant  the  all  too  common  assumption  and 
exercise  of  despotic  power  on  the  part  of  superintendents, 
foremen,  and  other  officials.  A  high  rate  of  turnover  is 
inevitable  where  officials  give  expression  to  autocratic  tem- 
perament in  unwarranted  fault  finding  and  spontaneous 
firing  of  employees.  Foremen  are  likely  to  have  personal 
likes  and  dislikes  and  religious  or  racial  prejudices  which 
often  result  in  the  promotion  of  inefficient  over  efficient 
workers,  or  the  hasty  discharge  of  deserving  employees. 

Unstabilized  production  grows  out  of  the  failure  of 
many  concerns  to  regulate  their  production  by  distributing 
orders  properly.  Regulation  and  stabilization  of  produc- 
tion have  been  accomplished  by  encouraging  the  trade  to 


Labor  Turnover  257 

place  orders  more  evenly  throughout  the  year.  Insuffi- 
cient wages,  excessive  hours,  and  poor  conditions  of  em- 
ployment, such  as  the  lack  of  toilet  facilities,  improper 
ventilation,  the  absence  of  rest  rooms  and  lunch  rooms, 
etc.,  drive  away  employees.  Inequality  in  wage  scales 
stimulates  labor  mobility;  workers  tend  to  move  to  the 
industry  having  the  most  favorable  wage  scale. 

3.  Social  Causes. — These  have  reference  to  the  inadequa- 
cies of  what  may  be  termed  the  social  environment  of 
industry  and  business.  The  inadequacies  consist  of  the 
lack  of  transportational  facilities,  such  as  street  car 
service  to  and  from  work ;  the  absence  of  sufficient  means 
of  communication,  such  as  telephones  and  newspapers; 
inadequate  housing  facilities;  and  the  absence  of  recrea- 
tional and  social  opportunities,  such  as  parks,  dance  halls, 
libraries,  etc.  These  causes  are  social  in  the  sense  that 
they  develop  out  of  community  conditions  rather  than 
from  conditions  over  which  the  employer  has  full  control. 
Employers  who  have  recognized  the  relation  between  these 
conditions  and  labor  turnover  have  begun  to  provide  such 
facilities  either  by  themselves  or  with  the  cooperation  of 
the  community. 

Skill  and  Sex  In  Relation  to  Turnover. — No  general 
quantitative  measurement  of  the  relative  stability  of 
skilled  and  unskilled  labor  is  available,  but  the  limited 
evidence  of  particular  studies  indicates  that  turnover  is 
greater  for  the  latter  than  for  the  former  group.  The 
proof  is  fairly  conclusive  that  rates  of  lay-off,  discharge, 
and  quits  are  each  higher  for  unskilled  than  for  skilled 
workers,  the  total  separation  rates  often  being  200  per 
cent  for  skilled  and  400  per  cent  for  unskilled.  About 
the  same  relation  is  shown  between  the  two  kinds  of  labor 
in  the  three  types  of  separation,  which  indicates  that 
skilled  workers  are  twice  as  stable  as  semiskilled  and  un- 
skilled workers. 

There  are  very  definite  reasons  for  this  disparity  in  the 
turnover  of  skilled  and  unskilled  workers.  The  difference 
may  be  generally  ascribed  to  the  higher  wngos  of  skilled 
labor  and  the  fact  that  both  in  periods  of  industrial  pros- 


258  Labor  Turnover 

perity  and  of  depression  the  employer  is  reluctant  to 
release  the  best-trained  workers  whom  he  may  have  diffi- 
culty in  replacing.  The  dearth  of  skilled  labor  thus  serves 
not  only  to  maintain  an  adequate  price  for  it,  but  also  to 
provide  greater  regularity  of  employment.  Moreover, 
skilled  workers  are  likely  to  be  a  more  settled  and 
more  generally  intelligent  class  than  the  unskilled,  facts 
which  explain  why,  in  place  of  frequent  migration  from 
job  to  job  and  place  to  place,  skilled  workers  seek  ad- 
vancement in  their  own  line  of  work  in  the  same  plant 
or  the  same  locality. 

Still  other  factors  enter  into  the  relatively  larger  turn- 
over of  unskilled  labor.  Skilled  workers  are  usually  or- 
ganized more  effectively  than  unskilled  workers,  so  it  is 
easier  for  them  to  secure  more  favorable  conditions  of 
employment.  This  results  in  a  greater  degree  of  content- 
ment among  skilled  laborers,  who  have  usually  been  the 
first  to  obtain  higher  wages,  shorter  hours,  and  improved 
conditions  of  work.  The  relative  scarcity  of  skilled  work- 
ers is  the  condition  responsible  for  their  greater  effective- 
ness in  bargaining  power.  Common,  unskilled  labor  is, 
as  a  rule,  not  difficult  to  replace,  while  skilled  labor  is 
not  easy  to  secure.  It  is  not  strange,  therefore,  that  the 
rate  of  discharge  is  greater  for  unskilled  than  for  skilled 
workers.  In  periods  of  business  and  industrial  prosperity 
even  unskilled  labor  becomes  relatively  scarce ;  employers 
must  take  what  they  can  get  and  careful  selection  is  not 
possible.  Consequently,  the  unskilled  labor  force  is  re- 
cruited from  the  class  of  workers  known  as  "migrants" 
or  "floaters"  who,  as  these  terms  suggest,  do  not  remain 
long  at  any  one  job,  and  the  percentage  of  labor  turnover 
is  increased. 

Keliable  investigations  of  labor  turnover  throw  very 
little  light  upon  the  relative  stability  of  men  and  women 
workers.  Much  of  the  information  was  gathered  during 
the  abnormal  period  of  the  World  War  when  the  rate 
of  turnover  for  men  was  inevitably  higher  than  for  women 
because  of  military  service  and  the  general  substitution 
of  female  for  male  workers.  The  consequence  was  that 


Labor  Turnover  259 

the  rate  of  separations  for  men  was  frequently  four  times 
as  great  as  for  women.3  There  is  every  reason  to  believe 
that  even  in  normal  periods  female  labor  is  more  stable 
than  male  labor.  Several  factors  account  for  this.  Women 
are  less  independent  industrially  than  men  because  of  a 
conspicuous  lack  of  organization  and  skill  among  them. 
Moreover,  comparatively  few  women  join  the  ranks  of 
the  migratory  workers.  General  social  and  industrial 
stigma  is  attached  to  migratory  women  workers,  a  fact 
which  lessens  their  mobility.  It  should  not  be  forgotten, 
however,  that  labor  turnover  among  women  is  accentuated 
by  marriage  when,  unlike  men,  they  leave  the  employ 
of  the  company. 

The  Economic  Waste  of  Labor  Turnover. — It  has  been 
demonstrated  conclusively  that  labor  turnover  entails  an 
enormous  waste.  Not  only  does  this  flux  in  personnel 
conduce  to  economic  inefficiency  and  social  degeneration, 
but  these  in  turn  produce  labor  turnover.  Excessive  fre- 
quency of  migration  of  workers,  whether  it  be  from  one 
plant  to  another  or  from  one  occupation  to  another,  fur- 
nishes no  real  benefit  or  gain  to  laborers,  and  is  expensive 
for  both  the  employer  and  the  nation.  A  certain  amount 
of  turnover  may  be  a'healthy  protest  against  unfavorable 
working  conditions,  but  the  necessity  of  even  this  per- 
centage of  turnover  conduces  to  economic  waste  which 
should  be  avoided  whenever  possible. 

From  a  financial  standpoint,  the  employer's  additional 
costs  on  account  of  labor  turnover  may  be  summarized 
as  follows:  the  clerical  cost  incident  to  hiring  and  firing; 
the  cost  involved  in  the  instruction  of  new  employees  by 
foremen  and  assistants ;  increased  breakage  and  wear  and 
tear  of  machinery  and  equipment  by  new  workers;  re- 
duced rate  of  production  inevitably  resulting  from  the 
employment  of  new  workers  who  must  learn  the  methods 
and  processes  of  a  new  job;  and  increased  quantity  of 
spoiled  work  by  new  employees. 

The  cost  of  labor  turnover  per  man  will  vary  with  the 
amount  of  previous  training,  the  amount  or  degree  of 

'Monthly  Labor  Review,  December,  1919,  p.  142. 


260  Labor  Turnover 

skill  required  by  the  job  and  possessed  by  the  new  worker, 
and  the  natural  aptitude  and  adaptability  of  the  laborer. 
Some  employment  managers  estimate  the  cost  of  breaking 
in  a  new  worker  at  an  average  of  $30  per  man,  while 
others  put  it  anywhere  from  $50  to  $300  per  man.  Most 
estimates  range  from  $50  to  $100  for  each  new  employee. 
In  an  investigation  of  labor  turnover  in  twelve  plants 
several  years  ago,  the  annual  unnecessary  expense  of  en- 
gaging 22,031  employees  in  one  year  was  stated  to  be 
from  $831,030  to  $1,000,000.*  The  annual  expense  to  the 
Ford  Motor  Company  on  account  of  the  400  per  cent  or 
more  labor  turnover  already  referred  to  exceeded  $2,000,- 
000.  At  an  average  cost  of  $40  per  employee  the  total 
annual  expense  of  labor  turnover  in  20  firms  whose  em- 
ployment records  were  examined  would  be  $1,760,000,  or 
an  average  of  $88,000  per  firm.  Conservative  estimates 
put  the  total  annual  cost  of  labor  turnover  for  the  United 
States  as  a  whole  from  $100,000,000  to  $200,000,000. 
"This  constant  flux  and  change  in  industrial  organizations 
represents  a  tremendous  hindrance  to  production  and  to 
profits.  It  signifies  a  heavy  investment — rather  expense — 
for  unproductive  effort.  It  is  an  outgo  that  bears  little 
or  no  relation  to  output. ' ' 5 

The  Social  Aspects  of  Labor  Turnover. — Labor  turnover 
is  a  problem  that  concerns  chiefly  the  employer,  and  what- 
ever remedies  may  be  forthcoming  will  have  to  come 
mainly  from  the  employing  group.  This  does  not  mean, 
necessarily,  that  the  problem  has  no  social  phases.  If 
labor  turnover  tends,  as  it  inevitably  must,  to  cause 
economic  dependency  and  social  delinquency,  society  is 
vitally  interested  in  the  eradication  of  the  complex  causes 
that  produce  so  serious  a  problem.  Excessive  labor  mo- 
bility in  its  various  aspects  encourages  idleness,  idleness 
is  reflected  in  economic  insufficiency,  which  in  turn  forces 
the  victim  to  rely  upon  charitable  sources  for  main- 
tenance, or  leads  him  to  adopt  antisocial,  delinquent 

4  See  article  by  Magnus  W.  Alexander,  The  Annals  of  the  American 
Academy  of  Political  and  Social  Science,  Vol.  LXV,  p.  138. 

'  U.  8.  Department  of  Labor,  Training  Service,  Bulletin  No.  5, 
1919,  p.  5. 


Labor  Turnover  261 

methods  of  support.  The  problem  is  one  in  which  not 
only  the  individual  employer,  but  the  individual  employee, 
and  the  community  should  be  concerned.  The  social  cost 
of  such  a  problem  cannot  be  measured  in  monetary  values. 

Methods  of  Reducing-  Labor  Turnover. — While  it  may; 
not  be  possible,  under  our  present  methods  of  production 
and  distribution,  to  eliminate  altogether  labor  turnover, 
much  can  be  done  to  prevent  the  enormous  economic  and 
social  cost.  The  suggestions  advanced  for  the  reduction 
of  labor  turnover  include:  the  establishment  of  a  cen- 
tralized and  specialized  employment  department  to  assume 
full  control  of  employing,  handling,  and  discharging 
workers ;  a  proper  system  of  apprenticeship  and  methods 
of  promotion;  a  more  careful  selection  and  placement  of 
employees;  job  analysis,  by  means  of  which  information 
may  be  secured  concerning  the  physical  and  mental  capac- 
ities required  by  specific  jobs ;  improved  labor  standards ; 
special  inducements  for  continuous  service,  such  as  profit- 
sharing,  bonuses,  and  stock  distribution;  improvement  in 
living  and  housing  conditions;  regulation  of  production; 
establishment  of  amicable  relations  between  the  heads  of 
departments  and  their  employees;  organization  of  plant 
committees  composed  of  representatives  of  employers  and 
employees ;  and  establishment  of  a  welfare  department. 

Constructive  labor  policies  such  as  the  ones  just 
enumerated  have  stabilized  the  labor  forces  in  many  es- 
tablishments, with  immeasurable  benefits  to  the  corpora- 
tion, the  workers,  and  the  community.  The  Saxon  Motor 
Company,  during  the  first  year  of  operation  of  its  employ- 
ment department,  reduced  its  labor  turnover  140  per  cent. 
From  October,  1912,  to  October,  1913,  the  Ford  Motor 
Company  hired  54,000  men  to  keep  an  average  working 
force  of  13,000,  while  from  October,  1913,  to  October, 
1914,  the  company  hired  only  7,000  men  to  maintain  an 
average  employee  force  of  17,000.  Eliminating  the  4,000 
employees  who  were  added  to  build  up  the  permanent 
working  force,  those  data  mean  that  only  3,000  men  were 
hired  to  keep  up  the  same  force  of  13,000  men.  These 
figures  indicate  that  turnover  was  reduced  from  more 


262  Labor  Turnover 

than  400  per  cent  to  only  23  per  cent.  Nine  months  of 
profit-sharing  was  said  to  be  the  factor  responsible  for 
this  reduction  of  wasteful  mobility  of  labor.  The  im- 
provement represented  a  saving  to  the  company  of  at 
least  $2,040,000,  a  return  of  24  per  cent  on  a  profit-sharing 
bonus  which  was  intended  as  a  free  gift.6  Swift  and 
Company  recently  spent  over  $150,000  in  putting  its  five 
thousand  foremen  through  a  course  of  training  designed 
primarily  to  teach  them  how  to  handle  their  men  so  as 
to  increase  industrial  goodwill  and  reduce  labor  turn- 
over. The  results  have  been  very  satisfactory,  and  not 
a  single  official  denies  that  this  expenditure  was  good 
business.  These  experiences  could  be  duplicated  from  a 
vast  number  of  American  companies  that  have  a  definite, 
constructive  labor  policy,  adequate,  centralized  employ- 
ment machinery,  and  systematic  and  continuous  employ- 
ment records.  Whether  in  periods  of  industrial  prosperity 
and  price  inflation  or  in  periods  of  business  depression  and 
price  recession,  the  reduction  of  labor  turnover  is  sound 
business  policy. 

Conclusions. — Labor  turnover  stands  out  as  one  of  the 
glaring  deficiencies  in  our  industrial  organization  and 
operation,  entailing  immeasurable  economic  and  social 
waste,  and  conducing  to  industrial  and  social  demoraliza- 
tion. Moreover,  the  effects  of  labor  turnover  are  cumula- 
tive, in  that  they  breed  additional  labor  mobility,  which 
in  turn  results  in  inefficiency  and  further  labor  turnover. 
The  problem  is  not  purely  an  industrial  one  but  has  cer- 
tain social  aspects  which  command  the  interest  and  inter- 
ference of  society.  Recognition  of  the  problem  of  labor 
turnover  augurs  much  for  its  rapid  voluntary  reduction 
by  employers,  who  are  already  instituting  many  remedies. 
Excessive  labor  mobility  is  attributable  to  specific  causes 
which  must  be  eliminated  before  a  solution  is  possible. 
The  problem  of  labor  mobility  in  America  is  aggravated 
by  the  seasonal  character  of  many  of  our  industries  and 
the  presence  of  a  large  migratory  laboring  population. 

•Boyd  Fisher,  Annals  of  the  American  Academy  of  Political  and 
Social  Science,  Vol.  LXV,  p.  144. 


Labor  Turnover  263 


SELECTED  REFERENCES 

ALEXANDER,  M.  W.,  Hiring  and  Firing,  American  Academy  of 
Political  and  Social  Science,  Philadelphia,  Annals,  65:128- 
144,  May,  1916. 

COLVIN,  F.  H.,  Labor  Turnover,  Loyalty,  and  Output,  1919. 

COMMONS,  J.  R.  (editor),  Trade  Unionism  and  Labor  Problems, 
second  edition,  1921,  Chap.  XII. 

DOUGLAS,  P.  H.,  The  Problem  of  Labor  Turnover,  Amer.  Econ. 
Rev.,  8:306-316,  June,  1918. 

FISHER,  BOYD,  Determining  the  Cost  of  Labor  Turnover,  Ameri- 
can Academy  of  Political  and  Social  Science,  Philadelphia, 
Annals,  71:44-50,  May,  1917. 

FISHER,  BOYD,  Methods  of  Reducing  Labor  Turnover,  American 
Academy  of  Political  and  Social  Science,  Philadelphia, 
Annals,  65:144-154,  May,  1916. 

FRANKEL,  L.  K.,  AND  FLEISHER,  ALEXANDER,  The  Human  Factor 
in  Industry,  1920,  Chap.  III. 

KELLY,  R.  W.,  Hiring  the  Worker,  1918,  pp.  25-44. 

LESCOHIER,  D.  D.,  The  Labor  Market,  1919,  Chap.  IV. 

PARKER,  C.  H.,  The  California  Casual  and  His  Revolt,  Quarterly 
Jour,  of  Econ.,  30 :110-126,  Nov.,  1915. 

SIMONS,  A.  M.,  Personnel  Relations  in  Industry,  1921,  Chap.  XIII. 

SLIGHTER,  S.  H.,  Turnover  of  Factory  Labor,  1919. 

TEAD,  ORDWAY,  AND  METCALF,  H.  C.,  Personnel  Administration, 
1920,  Chap.  XX. 

WATKINS,  G.  S.,  An  Analysis  of  Labor  Turnover,  Administra- 
tion, 2:27.35,  July,  1921. 


CHAPTER  XIII 


Immigration  in  Relation  to  Population. — Immigration 
has  always  been  an  important  factor  in  the  development  of 
new  countries.  As  Professor  Lescohier  has  pointed  out, 
"human  population  tends  to  flow  from  poorer  environ- 
ments into  better  ones  and  will  do  so  as  long  as  there 
are  marked  inequalities  of  welfare  in  different  lands"; 
it  is  a  part  of  a  world  process  of  social  equilibration  which 
is  a  law  of  life  as  real  as  the  law  of  gravitation.1  The 
desire  to  achieve  economic  betterment  is  irrepressible,  and 
immigration  will  continue  to  be  a  primary  source  of 
population  for  new  countries.  The  nature  of  human  mi- 
grations has  changed  considerably.  Whereas  early  migra- 
tions were  made  by  organized  groups,  the  population 
movements  of  recent  centuries  have  been  preeminently 
movements  of  individuals,  or  at  most  of  families,  except 
minor  group  migrations  of  religious  sects,  as  the  Mora- 
vians. 

In  the  United  States  the  immigration  problem  has 
developed  from  the  polyglot  racial  elements  and  the  divers 
standards  of  life  and  civilization  which  the  different  races 
and  nationalities  have  brought  with  them.  One  of  the 
outstanding  characteristics  of  the  population  of  the 
United  States  is  its  heterogeneity,  a  condition  which  has 
made  it  extremely  difficult  to  develop  national  unity  and 
national  institutions.  In  1920,  for  example,  our  population 
of  105,710,620  comprised  94,820,915  whites;  10,463,131 
negroes;  244,437  Indians;  61,639  Chinese;  111,010  Japa- 
nese ;  and  9,488  miscellaneous  racial  groups.  Of  the  total 
native  white  population  of  81,108,161  in  1920,  58,421,957, 
or  55.3  per  cent  were  born  of  native  parentage ;  15,694,539, 

1  The  Labor  Market,  pp.  3,  7. 

264 


Immigration  265 

or  14.8  per  cent,  were  born  of  foreign  parentage;  and 
6,991,665,  or  6.6  per  cent,  were  born  of  mixed  parentage. 
Foreign-born  whites  numbered  13,712,754,  constituting  13 
per  cent  of  the  total  white  population.  Thus,  at  the 
present  time,  almost  thirty  million  people  in  the  United 
States,  or  approximately  28  per  cent  of  the  total  white 
population,  are  either  foreign-born  or  born  of  foreign 
parentage. 

History  of  Immigration  in  the  United  States. — The 
American  colonies  were  settled  originally  by  groups  of 
ambitious  individuals  from  the  United  Kingdom,  largely 
from  England.  Other  nationalities,  chiefly  French,  Swedes, 
Dutch,  and  Germans,  contributed  about  one-fifth  of  the 
population  of  the  colonies  in  1775.  The  early  settlement 
of  the  United  States  was  exceedingly  slow,  on  account  of 
the  severe  hardships  that  were  incidental  to  the  primeval 
conditions  of  the  New  World.  Not  more  than  250,000 
persons  came  to  this  country  between  1776  and  1820.  The 
following  table  indicates  that  in  the  one  hundred  years — 
1820  to  1920— the  United  States  received  almost  34,000,- 
000  immigrants,  about  70  per  cent  of  whom  have  come 
since  1881  and  43  per  cent  since  1901. 

IMMIGRATION  TO  THB  UNITED  STATES,  1820-1920,  BY  DECADES. 

Number  of  Percentage 

Period  Immigrant!  Distribution 

1820-1830  151,824  .45 

1831-1840  599,125  1.78 

1841-1850  1,713,251  5.09 

1851-1860  2,598,214  7.72 

1861-1870  2,314,824  6.88 

1871-1880  2,812,191  8.36 

1881-1890  5,246,613  15.59 

1891-1900  3,687,564  10.96 

1901-1910  8,795,386  26.13 

1911-1920  5,735,811  17.06 

Total 33,654,803  100.00 

The  periods  of  maximum  immigration  to  the  United 
States  have  coincided  roughly  with  periods  of  industrial 
activity.  Certain  high  levels  stand  out  noticeably.  In 


So'tf  Immigration 

1854  the  number  of  immigrants  reached  a  total  of  427,833, 
then  declined  with  some  variation  to  1862  when  only 
72,183  arrived.  This  period  was  followed  by  a  more  or 
less  regular  increase  until  the  high  peak  of  459,803  was 
reached  in  1873,  after  which  there  was  a  rapid  decline 
to  only  138,409  in  1878.  Following  1878  the  tide  of  im- 
migration rose  with  unprecedented  rapidity  until  1882, 
when  788,992  alien  persons  came  to  our  shores.  The  in- 
flux was  irregular  until  the  maximum  of  857,046  was 
reached  in  1903.  Subsequent  to  1903  immigration  con- 
tinued at  a  high  rate,  the  period  ending  with  the  unpre- 
cedented number  of  1,285,349  in  1907,  which  remains  the 
highest  figure  in  the  history  of  American  immigration. 
After  a  decline  of  a  few  years,  a  revival  took  place  in 
1910,  when  1,041,570  immigrants  arrived.  After  dropping 
to  838,172  in  1912,  the  immigrant  tide  registered  1,197,892 
persons  in  1913,  and  1,218,480  in  1914.  The  outbreak  of 
the  World  War  caused  a  rapid  falling  off  in  our  immigra- 
tion, the  total  number  of  arrivals  during  the  years  1915- 
1918  inclusive  being  only  1,031,547,  or  a  yearly  average 
of  only  257,887.  Since  1918  the  immigrant  tide  has  gradu- 
ally been  approaching  its  prewar  level,  the  numbers  being 
141,132  in  1919,  430,001  in  1920,  and  805,228  in  1921. 

Statistics  of  immigration  do  not  represent  a  net  gain 
to  a  country's  population,  since  each  year  finds  a  large 
number  of  aliens  returning  to  their  home  lands.  In 
periods  of  industrial  depression  the  volume  of  emigration 
is  significant.  Thus,  in  1908,  a  year  of  business  depres- 
sion, the  alien  immigration  was  782,870,  while  alien 
emigration  reached  a  total  of  395,073,  the  net  gain  to  our 
population  through  immigration  being  only  387,797.  Be- 
tween 1900  and  1921  the  total  number  of  immigrants  was 
about  fifteen  millions,  while  the  net  addition  to  our  popu- 
lation was  approximately  eleven  millions,  which  would 
indicate  that  the  net  addition  to  our  population  through 
immigration  was  about  70  per  cent  of  the  total  alien 
immigration.  This  means  that  a  majority  of  our  immi- 
grants come  to  seek  permanent  homes  and  not  for  tem- 
porary employment  in  prosperous  periods.  "Birds  of 


Immigration  267 

passage,"  about  whom  so  much  has  been  written,  con- 
stitute a  far  less  important  element  in  our  immigrant  prob- 
lem than  some  writers  suppose.  A  large  number  of  those 
who  return  to  their  native  lands  sojourn  there  only  a 
little  while,  then  come  back  to  the  United  States  to  make 
permanent  homes,  bringing  with  them  relatives  or  friends 
who  help  to  swell  the  tide  of  our  immigration. 

Causes  of  Immigration. — The  desire  for  economic  bet- 
terment, political  oppression,  religious  persecution,  and 
numerous  other  factors  have  been  responsible  for  the 
movement  of  population  to  the  United  States.  From  every 
corner  of  the  Old  World  restless,  ambitious,  dissatisfied 
individuals  have  journeyed  westward  to  seek  refuge  from 
undesirable  conditions.  The  Pilgrim  Fathers,  Armenians, 
Russian  and  Roumanian  Jews,  the  Scotch-Irish,  and 
numerous  other  peoples  came  to  this  continent  in  search 
of  religious  and  political  freedom.  The  unsuccessful 
revolutions  in  Europe  during  the  decade  of  the  forties 
forced  their  exponents  to  cross  the  Atlantic  to  escape 
political  punishment.  With  the  exception  of  Jewish  im- 
migrants from  certain  European  countries  and  a  consider- 
able number  who  have  come  to  escape  the  political  chaos 
of  Europe  following  the  World  War,  immigration  from 
religious  or  political  causes  is  now  relatively  unimportant. 

Immigration  must  be  explained  largely  in  terms  of 
economic  conditions.  Periods  of  industrial  prosperity  and 
business  expansion  are  accompanied  by  a  rapid  rise,  and 
periods  of  business  depression  by  a  decline,  in  immigration. 
The  business  and  financial  disturbances  of  1873,  1893,  and 
1907,  for  example,  were  followed  by  marked  declines  in 
immigration,  but  the  subsequent  periods  of  industrial 
prosperity  stimulated  the  influx  of  aliens.  The  immigrant 
tide  has  ebbed  and  flowed  with  increasing  sensitiveness 
to  prevailing  economic  conditions,  although  there  has  been 
no  perfect  adjustment  of  immigration  and  emigration  to 
the  conditions  of  the  labor  market. 

Wages  and  general  conditions  of  employment  in  the 
United  States  have  perhaps  been  the  most  potent  influence 
in  inducing  immigration.  The  economic  status  of  the 


268  Immigration 

wage-earner  is  generally  much  less  favorable  in  Europe 
than  in  the  United  States.  This  is  especially  true  of  un- 
skilled workers,  who  constitute  so  large  a  proportion  of 
our  immigrants.  The  money  wages  of  these  workers  in 
southern  and  eastern  Europe,  from  which  we  receive  about 
80  per  cent  of  our  immigrants,  are  frequently  not  one- 
third  as  much  as  the  wages  for  the  same  class  of  labor 
in  the  United  States.  Agricultural  labor  in  Europe  is 
very  inadequately  paid,  employment  is  highly  seasonal, 
and  often  the  peasantry  is  unable  to  purchase  land.  In 
some  parts  of  southern  and  eastern  Europe  the  average 
wage  of  men  engaged  in  common  and  agricultural  labor 
has  often  been  less  than  fifty  cents  a  day,  while  in  other 
sections  the  wage  scale  has  been  lower.  Moreover,  the 
low  cost  of  living  of  these  workers  is  attributable  to  their 
low  standard  rather  than  to  the  cheapness  of  food  and 
other  necessities. 

The  desire  to  escape  military  service  is  a  primary  cause 
of  emigration  from  those  countries  where  such  service  is 
compulsory.  Military  service  interferes  with  the  economic 
life  of  young  men  during  the  period  of  service,  results 
in  postponement  of  marriage,  and  interferes  with  the  op- 
portunity to  accumulate  a  surplus.  Under  these  conditions 
military  duties  become  burdensome  and  Europeans  have 
crossed  the  Atlantic  to  escape  them. 

Besides  the  primary  or  underlying  causes  of  immigra- 
tion, there  are  certain  contributory  or  secondary  causes 
which  are  responsible  in  part  for  the  movement  of  aliens 
to  the  United  States.  Prominent  among  these  secondary 
causes  is  the  advice  and  assistance  of  relatives  or  friends 
who  have  already  established  themselves  in  this  country. 
Through  the  medium  of  letters  and  personal  visits  from 
immigrants  familiar  with  the  more  attractive  conditions 
of  the  New  World  the  economic  opportunities  of  the 
United  States  are  given  wide  publicity.  In  the  countries 
of  southern  and  eastern  Europe  each  village  or  com- 
munity has  contributed  its  quota  to  our  immigrant  tide, 
chiefly  because  letters  from  friends  and  relatives  have 
described  the  attractive  wage  scale  and  the  opportunities 


Immigration  £69 

for  employment  in  the  new  country.  Returned  emigrants 
who  have  achieved  success  and  acquired  some  wealth  in 
the  United  States  dispense  information  freely,  often  with 
exaggeration,  and  so  inspire  whole  communities  to  emi- 
grate. Nearly  all  European  immigrants  admitted  to  the 
United  States  state  that  they  are  going  to  join  relatives 
or  friends,  which  is  evidence  of  the  importance  of  the 
advice  of  friends  as  an  immediate  cause  of  population 
movements  to  this  country.  On  the  other  hand,  informa- 
tion of  industrial  depression  spreads  quickly  and  our  tide 
of  immigration  recedes. 

Another  important  factor  in  inducing  emigration  is  the 
effective  propaganda  disseminated  by  steamship  ticket 
agents.  Although  technically  illegal  according  to  the 
laws  of  many  European  countries  and  the  United  States, 
this  propaganda  "  flourishes  in  every  emigrant  furnishing 
country  of  Europe."  Responsibility  for  these  illegal 
solicitations  of  business  is  placed  not  upon  the  steamship 
companies  but  upon  agents  and  subagents  who  find  en- 
couragement of  emigration  a  profitable  enterprise.  Lead- 
ing steamship  lines  have  thousands  of  ticket  agents  in 
the  various  countries.  Steerage  business  is  very  important 
to  all  lines  operating  passenger  ships,  and  all  compete 
for  it.  Promotion  of  emigration  is  quite  general  and, 
although  many  governments  have  prohibited  its  encour- 
agement, devious  ways  have  been  found  to  evade  the 
law.  In  order  to  increase  commissions,  agents  distribute 
literature  and  highly  colored  posters  portraying  economic 
opportunities  here. 

Emigration  from  Europe  to  the  United  States  through 
public  assistance  is  relatively  unimportant.  At  various 
times  communities  have  been  guilty  of  assisting  emigra- 
tion of  public  charges  and  criminals,  but  such  instances 
are  believed  to  be  rare.  European  governments  view 
with  regret  emigration  of  their  young  and  able-bodied 
men  and  women,  and  comity  of  nations  would  tend  to 
prevent  deportation  of  criminals  and  paupers.  Attempts 
to  deport  the  physically  and  mentally  defective  would  be 
futile,  since  they  could  not  gain  admittance.  Previous 


270  Immigration 

to  the  restrictive  legislation  in  the  United  States,  however, 
large  numbers  of  undesirables  and  paupers  were  assisted 
in  their  emigration  from  the  British  Isles  and  other  coun- 
tries. 

The  Changing  Character  of  Immigration. — Remarkable 
changes  have  taken  place  in  the  sources  of  immigration 
to  the  United  States,  a  fact  which  is  generally  believed 
to  have  considerable  influence  upon  the  gravity  of  our 
problem.  Two  principal  groups  of  European  races  or 
peoples  are  the  primary  sources  of  American  immigration ; 
namely,  those  indigenous  to  northern  and  western  Europe, 
including  the  Dutch  and  Flemish,  English,  French,  Ger- 
man, Irish,  Scandinavian,  Scotch,  and  Welsh;  and  those 
who  come  from  southern  or  eastern  Europe,  comprising 
the  Italians  and  Sicilians,  Austrians,  Hungarians,  Rus- 
sians, Poles,  Syrians,  Bulgarians,  Greeks,  Montenegrins, 
Portuguese,  Roumanians,  Servians,  Spaniards,  and  Turks. 
The  northern  and  western  Europeans  are  referred  to  as 
the  "old  immigration,"  while  the  eastern  and  southern 
Europeans  are  designated  the  "new  immigration." 

Prior  to  1883  fully  95  per  cent  of  our  immigrants  were 
furnished  by  northern  and  western  Europe,  while  more 
than  70  per  cent  of  our  recent  immigration  has  been  from 
the  south  and  east  of  Europe.  As  the  new  immigration 
increased  in  volume  the  old  immigration  diminished.  In 
1882  western  Europe  furnished  86.9  per  cent  of  our  immi- 
gration, while  eastern  and  southern  Europe  furnished  13.1 
per  cent.  Only  a  small  proportion  came  from  the  latter 
section  until  in  the  late  eighties,  there  being  25  per  cent 
for  the  first  time  in  1887.  There  was  a  rapid  shift  in 
the  middle  of  the  nineties,  54.7  per  cent  coming  from  the 
north  and  west  and  43.2  per  cent  from  the  south  and  east, 
in  1895.  In  1901  the  percentage  for  the  old  immigration 
was  24.7,  and  for  the  new  immigration  75.3,  while  in  1907 
fully  81  per  cent  of  our  immigration  was  of  the  latter 
and  only  19  per  cent  belonged  to  the  former  class. 

The  Irish  came  in  largest  numbers  during  the  forties 
and  fifties;  the  Germans  in  the  fifties  and  eighties; 
and  the  English  in  the  seventies  and  eighties.  Not  until 


Immigration  271 

1900  did  the  Italians  exceed  the  100,000  mark,  but  their 
numbers  increased  to  285,000  in  1907  and  in  1913.  Like- 
wise immigration  from  Austria-Hungary  did  not  exceed 
100,000  until  1900,  but  totaled  about  338,000  in  1907  and 
in  1913.  In  1914  only  10  per  cent  of  the  total  immigra- 
tion came  from  northern  and  western  Europe,  while  from 
Italy  alone  came  23  per  cent  of  the  total  and  a  similar 
percentage  was  furnished  by  Austria-Hungary.  In  that 
year  Russia,  including  Finland,  was  the  source  of  21  per 
cent  of  our  immigration.  Thus  it  is  evident  that  for  many 
years  prior  to  the  World  War  the  new  immigration  pre- 
dominated. Moreover,  the  figures  for  1921  indicate  that 
this  predominance  will  not  be  lost  in  the  near  future. 
Of  the  more  than  800,000  immigrants  arriving  in  1921, 
the  Italians  numbered  222,496,  or  more  than  one-fourth, 
while  the  Greeks,  Poles,  and  Czechoslovaks  aggregated 
over  164,000,  or  about  11  per  cent.  At  the  same  time 
the  United  Kingdom  furnished  less  than  80,000  immi- 
grants, or  about  5  per  cent  of  the  total,  and  Scandinavia 
less  than  23,000,  or  about  one  per  cent  of  the  whole. 

The  significance  of  this  change  in  the  character  of  our 
immigration  is  found  in  certain  well-defined  differences 
between  the  new  and  the  old  immigration.  (1)  The  immi- 
gration from  northern  and  western  Europe  was  essentially 
one  of  permanent  settlers,  while  the  immigration  from 
eastern  and  southern  Europe  comprises  a  considerable 
number  who  have  little  or  no  intention  of  establishing 
permanent  homes  in  the  United  States,  but  who  wish  to 
accumulate  a  small  fortune  and  then  return  home  to  live 
in  what  is  considered  there  a  state  of  affluence.  It  has 
been  found  that  nearly  40  per  cent  of  the  new  immigrants 
return  to  Europe,  two-thirds  of  whom  remain  there  and 
make  permanent  investments  in  their  home  countries.  Be- 
tween 1908  and  1920  thirty-six  aliens  left  the  United 
States  for  every  one  hundred  admitted.  There  are  some 
indications  that  the  present  Greek  and  Italian  immigra- 
tion represents  a  more  permanent  class  than  came  prior 
to  the  war,  but  no  definite  conclusions  can  be  made  with 
regard  to  this.  (2)  The  old  immigration  came  to  the 


272  Immigration 

United  States  during  a  period  of  general  development 
and  was  a  significant  factor  in  that  development,  while 
the  new  immigration  has  come  in  a  period  of  great  indus- 
trial expansion,  making  available  an  almost  unlimited 
supply  of  labor.  (3)  As  a  class,  the  new  immigrants  are 
unskilled  workers  coming  from  countries  where  the  high- 
est wage  is  small  compared  with  the  lowest  wage  in  the 
United  States;  the  old  immigrants  came  from  lands  where 
the  wage  standards  were  more  favorable,  although  not 
so  high  as  in  this  country. 

In  many  other  aspects  the  new  immigration  manifests 
interesting  characteristics.  Nearly  75  per  cent  of  them 
are  males,  and  about  83  per  cent  are  between  the  ages 
of  14  and  45 — the  ages  of  productivity  rather  than  de- 
pendence. They  bring  little  money  into  the  country  and 
send  no  small  proportion  of  their  earnings  to  their  native 
lands.  More  than  35  per  cent  of  the  new  immigrants 
are  illiterate,  as  compared  with  less  than  3  per  cent  of 
the  old  immigrants.  On  the  other  hand,  immigration  was 
practically  unregulated  prior  to  1882,  and  many  immi- 
grants were  not  self-supporting,  but  became  a  burden 
upon  the  various  states  where  they  augmented  the  pauper 
class.  The  new  immigration  is  for  the  most  part  care- 
fully regulated  as  to  health  and  financial  status.  The 
early  immigrants  went  in  large  numbers  to  rural  districts, 
took  up  land  and  became  productive  farmers,  while  the 
new  immigrants,  finding  the  supply  of  free  or  cheap  land 
practically  exhausted,  flock  to  manufacturing  centers  to 
join  the  ranks  of  city  wage-earners  and  city  dwellers. 

Points  of  View. — There  is  wide  difference  of  opinion 
concerning  the  nature  and  acuteness  of  the  immigration 
problem.  The  various  points  of  view  are  influenced 
greatly  by  political,  racial,  religous,  economic,  and  ethical 
considerations.  Several  points  of  view  may  be  noted.  (1) 
Employers  of  labor  are  likely  to  find  no  cause  for  anxiety; 
in  an  unrestricted  influx  of  aliens,  since  it  furnishes  an 
abundant  supply  of  cheap  labor.  A  large  proportion  of 
the  new  immigrants  are  tractable  and,  being  ignorant  of 
American  standards  of  employment,  do  not  demand  de- 


Immigration  273 

sirable  conditions.  An  "open  door"  for  immigrant  labor, 
therefore,  appeals  to  the  employer.  (2)  American  wage- 
earners,  on  the  other  hand,  are  convinced  that  the  un- 
regulated influx  of  immigrants  menaces  American 
standards  of  labor.  A  lower  standard  of  living  enables 
recent  immigrants,  as  sellers  of  labor-power,  to  offer  their 
services  at  a  cheaper  rate  than  native-born  Americans.  It 
is  natural  that  this  disruption  of  the  labor  market  and 
the  lowering  of  the  standards  of  employment  should  be 
resented  by  American  wage-earners.  (3)  There  is  a  large 
number  of  persons  who,  an  account  of  their  sincere  al- 
truism or  because  of  political  motives,  desire  to  main- 
tain the  historic  ideal  of  America  as  the  haven  of  refuge 
for  those  who  seek  to  escape  from  the  religious  persecu- 
tion, political  oppression,  or  economic  distress  of  less  for- 
tunate countries.  (4)  Many  individuals,  including  most 
social  scientists,  have  concluded  from  thorough  examina- 
tion of  the  effects  of  immigration  that  uncontrolled  or 
inadequately  selected  immigration  results  in  making  more 
acute  such  social  problems  as  crime,  pauperism,  and 
illiteracy.  Generally  speaking,  the  immigration  problem 
is  fundamentally  one  of  preserving  American  standards 
and  ideals.  Civilization,  after  all,  is  but  the  composite 
of  prevailing  norms  of  life  and  culture,  ethical  and  social 
standards,  and  economic  practices  which  a  people  accepts 
as  desirable.  Whatever  tends  to  strengthen  these 
standards  of  civilization  should  be  approved;  whatever 
conduces  to  their  degeneration  should  be  rejected.  The 
extent  to  which  the  quality  and  quantity  of  immigrant 
aliens  affect  American  standards  of  life,  welfare,  and 
progress  constitutes  the  proper  basis  of  judgment  as  to 
the  merits  or  demerits  of  immigration. 

Distribution  of  Immigrants. — It  is  often  stated  that  the 
problem  of  immigration  is  basically  a  question  of  proper 
distribution.  If  immigrants  were  widely  distributed  over 
the  United  States,  the  intensity  of  their  competition  with 
native  workmen  would  be  greatly  diminished  and  instead 
of  crowding  into  the  large  cities  they  would  live  where 
population  is  not  congested.  The  practicability  of  dis- 


£74  Immigration 

tribution  as  a  solution  of  the  immigration  problem  will 
depend  upon  the  agricultural  adaptability  of  the  immi- 
grants. It  is  a  well-established  fact  that  a  large  portion 
of  the  recent  immigration  has  been  recruited  from  the 
peasantry  of  Europe,  but  it  must  be  remembered  that  the 
type  of  agriculture  to  which  these  persons  have  been 
accustomed  is  distinctly  different  from  that  which  pre- 
vails in  the  United  States.  Moreover,  there  is  experiential 
basis  for  the  belief  that  the  new  immigrants  have  prac- 
tically no  desire  to  enter  agricultural  pursuits  when  they, 
come  to  this  country.  Foreign-born  whites  constituted 
only  7.6  per  cent  of  the  total  rural  population  in  1900, 
and  the  percentage  declined  to  6.5  per  cent  in  1920.  On 
the  other  hand  they  constituted  19.1  per  cent  of  urban 
population  in  1920. 

There  is  a  marked  tendency  for  immigrants  to  settle 
in  certain  sections  of  the  country.  Of  the  1,285,000  im- 
migrants who  came  to  the  United  States  in  1907,  fully 
65  per  cent  went  to  the  North  Atlantic  States;  23  per 
cent  to  the  North  Central  States;  only  6  per  cent  to  the 
"Western  States;  and  only  4.5  per  cent  to  the  Southern 
States.  The  distribution  of  the  13,712,754  foreign-born 
whites  in  1920  was  as  follows: 2 

Percentage  of  the 

Geographic  Divisions  Number  Total  Population 

New  England    1,870,654  25.2 

Middle  Atlantic    4,912,575  22.5 

East  North  Central 3,223,279  15.0 

West  North   Central 1,371,961  10.9 

South  Atlantic    315,920  2.2 

East  South  Central 71,939  .8 

West  South  Central 459,333  4.4 

Mountain   453,225  13.5 

Pacific    1,033,868  18.5 

The  foregoing  figures  indicate  that  whereas  the  foreign- 
born  whites  constitute  from  18  to  25  per  cent  of  the  popu- 
lation in  New  England,  Middle  Atlantic,  and  Pacific  divi- 
sions, they  form  an  average  of  only  about  3  per  cent 
in  the  southern  regions.  The  total  alien  population  of 

1  Compiled  from  the  Fourteenth  Census  of  the  U.  S.,  1920. 


Immigration  275 

all  the  southern  states,  including  Texas,  is  only  about 
563,000  out  of  a  population  of  more  than  25,000,000,  or 
one  alien  to  every  forty-four  natives.  Even  in  the  North 
Central  and  Mountain  divisions  foreign-born  whites  con- 
stitute on  the  average  only  13  per  cent  of  the  total  popu- 
lation. More  than  70  per  cent  of  our  white  immigrants 
have  settled  in  the  New  England,  Middle  Atlantic,  and 
East  Central  States.  Of  the  almost  14,000,000  aliens  in 
the  United  States,  the  states  of  New  York,  Pennsylvania, 
Massachusetts,  and  Illinois  have  about  6,500,000,  or  a  little 
less  than  one-half  of  the  total. 

Many  reasons  may  be  assigned  for  the  tendency  of  im- 
migrants, especially  the  new  immigrants,  to  concentrate  in 
the  manufacturing  states  of  the  East  and  Central  West.  In 
the  South  competition  with  cheap  negro  labor  is  a  condi- 
tion which  immigrants  do  not  wish  to  face;  they  prefer 
competition  with  white  labor  in  the  North.  Having  very 
little  money  upon  their  arrival,  most  immigrants  from  the 
east  and  south  of  Europe  are  unable  to  travel  to  the  in- 
terior; for  this  reason  they  remain  in  the  industrial  states 
along  the  Atlantic  seaboard,  at  least  for  a  time.  The  new 
immigrants  are  excessively  clannish,  are  slow  to  learn 
the  language  and  customs  of  the  country,  and  are  dis- 
posed to  be  farm-shy.  They  have  been  accustomed  to 
living  in  villages  and  going  out  to  work  on  neighboring 
farms.  They  are  a  sociable  people,  and  they  dislike  the 
isolation  and  loneliness  of  American  farm  life.  The  ma- 
chine methods  of  American  agriculture  are  also  strange 
to  them.  Generally  the  new  immigrants  come  to  join 
relatives  or  friends  who  are  mostly  city  residents.  Hero 
they  find  groups  who  speak  the  same  language,  worship 
in  the  same  manner,  have  the  same  customs,  traditions 
and  modes  of  life  as  themselves;  here  they  find  the  foreign 
press  which  keeps  them  in  touch  with  the  home  land  and 
the  things  their  memories  cherish ;  and  in  periods  of  dis- 
tress they  find  in  cities  ready  relief  tendered  either  by 
their  own  people  or  by  numerous  charitable  organizations. 
Then,  too,  money  wages  of  farm  laborers  are  compara- 
tively low,  and  southern  and  eastern  Europeans,  who  can 


276  Immigration 

live  cheaply,  prefer  not  to  receive  a  part  of  their  earn- 
ings in  board  and  room  as  is  the  custom  on  American 
farms.  Agriculture,  moreover,  is  a  highly  seasonal  indus- 
try, so  they  crowd  into  our  city  industries  because  they 
desire  steady  work  in  order  to  save  money.  Finally,  the 
United  States  has  not  yet  devised  an  efficient  scheme  for 
proper  distribution  of  immigrants. 

Economic  Aspects  of  the  Immigration  Problem. — 1.  The 
Relation  of  the  Immigrant  to  Industrial  Development. — 
During  the  last  half-century  the  United  States  has  ex- 
perienced extraordinary  industrial  and  commercial  expan- 
sion. It  cannot  be  determined  whether  this  expansion 
stimulated  immigration,  or  immigration  promoted  expan- 
sion. In  all  probability  these  forces  were  mutually  inter- 
active. No  doubt  industrial  expansion  was  the  original 
reason  for  the  employment  of  millions  of  immigrants,  but 
the  availability  of  a  cheap  labor  supply  resulting  from  the 
continued  influx  of  immigrants  from  the  south  and  east 
of  Europe  stimulated  in  turn  industrial  development.  Im- 
proved machinery  has  made  possible  the  absorption  of  this 
new  labor  supply  by  American  industries.  Unskilled  and 
inexperienced  immigrants  are  able  to  operate  the  simplified 
machines,  with  the  result  that  division  and  subdivision  of 
labor  has  been  given  a  great  impetus  since  about  1880. 
The  industrial  development  of  the  United  States  has  been 
influenced  by  the  fact  that  the  newer  immigrants  have 
been  of  a  youthful  type,  mostly  men — strong,  matured  in- 
dividuals. Of  the  1,218,480  immigrant  aliens  admitted  in 
1914,  for  examplej  approximately  982,000  were  between 
the  ages  of  14  and  44;  about  159,000  were  under  14;  and 
a  few  more  than  78,000  were  45  or  over.  The  proportion 
of  females  among  immigrant  aliens  as  a  whole  was  42.4 
per  cent  of  the  total  in  1920,  as  compared  with  33.5  per 
cent  in  the  period  1910-1914.  Experience  has  indicated 
that  a  large  proportion  of  women  in  any  immigration 
movement  insures  more  permanent  residents,  while  a  pre- 
ponderance of  males  results  in  a  large  emigration  after 
a  few  years. 

2.  Occupational  Distribution  and  Displacement. — Every 


Immigration  277 

basic  industry  has  a  large  quota  of  the  new  immigrants, 
and  in  many  industries  it  has  been  found  that  from  50  per 
cent  to  80  per  cent  of  the  unskilled  workers  are  of  foreign 
birth.  Bituminous  coal  mining,  steel  manufacturing,  the 
garment  trades,  the  manufacture  of  cotton,  woolen,  and 
worsted  goods,  and  numerous  other  important  branches  of 
production  have  been  invaded  by  large  forces  of  new  im- 
migrants. Competition  with  eastern  and  southern  Euro- 
peans has  led  to  voluntary  or  involuntary  displacement  of 
the  native  American  and  older  immigrant  employees  in 
certain  occupations  and  industries,  such  as  bituminous  and 
anthracite  coal  mining,  and  iron  and  steel  manufacturing. 
A  certain  percentage  of  those  who  have  remained  have 
secured  executive  and  technical  positions,  but  most  of  them 
have  been  unable  to  stand  the  competitive  struggle  and 
have  abandoned  the  old  occupations  for  new  ones.  They 
have  been  pushed  out  rather  than  up,  and  the  stigma  of 
working  with  the  new  immigrants  has  resulted  in  occupa- 
tional segregation.  Those  who  have  remained  have  been 
characterized  as  thriftless  and  unprogressive.  Nor  does 
it  appear  that  children  of  the  new  immigrants  take  up 
the  menial  occupations  of  their  fathers.  So  general  has 
become  the  disapproval  of  working  with  eastern  and  south- 
ern Europeans  that  race  consciousness  has  led  to  race  sub- 
stitution in  manufacturing  and  mining. 

3.  Conditions  of  Employment. — Inexperience,  lack  of 
technical  training,  illiteracy,  and  ignorance  of  the  English 
language  on  the  part  of  immigrants  from  eastern  and  south- 
ern Europe"  have  exposed  native  American  and  older  im- 
migrant wage-earners  to  unsafe  and  unsanitary  conditions 
of  employment.  When  the  latter  protest  against  unde- 
sirable conditions  of  employment  the  new  immigrants  fail 
to  register  objections  and  continue  to  work.  It  will  be 
recalled  that  in  discussing  human  waste  in  industry  sta- 
tistical evidence  was  given  to  show  the  relation  that  exists 
between  industrial  inexperience  and  the  frequency  of  acci- 
dents. Large  numbers  of  the  new  immigrants  are  from 
the  peasantry  of  Europe  and  are  unfamiliar  with  the  ma- 
chine processes  of  manufacturing.  Recklessness,  ignorance, 


278  Immigration 

I 

and  inexperience  as  causes  of  industrial  accidents  have  been 
greatly  accentuated  by  the  presence  of  these  workers  in 
American  industries.  The  need  for  machine  guards,  ade- 
quate lighting  systems,  proper  ventilation,  reasonable  hours 
of  labor,  and  numerous  other  prerequisites  that  conduce  to 
health  and  safety  are  not  demanded  by  the  new  immi- 
grants, who  fear  that  by  protesting  against  unsatisfactory 
conditions  they  will  incur  the  displeasure  of  management. 

4.  The  Standard  of  Living. — Many  persons  urge  that  the 
problem  of  immigration  is  fundamentally  one  of  acute  com- 
petition between  different  standards  of  life.  Recent  immi- 
gration has  brought  to  the  United  States  hordes  of  people 
who  keep  filled  the  slum  districts  of  our  large  industrial 
centers.  One  race  moves  out  into  better  quarters  and 
another  race,  reinforced  with  numbers  of  its  own  kind  fresh 
from  across  the  water,  moves  in  to  serve  its  time  in  the 
filth  and  squalor  of  city  slums — the  black  spots  in  American 
civic  life.  The  United  States  Immigration  Commission 
pointed  out  that  the  life,  interest,  and  activity  of  the  aver- 
age wage-earner  from  southern  and  eastern  Europe  seems 
to  revolve  principally  about  three  aims:  (1)  to  earn  the 
largest  possible  amount  of  immediate  earnings  under  exist- 
ing conditions  of  work;  (2)  to  live  upon  the  basis  of 
minimum  cost;  and  (3)  to  save  as  much  as  possible.  ''The 
ordinary  comforts  of  life  as  insisted  upon  by  the  average 
American  have  been  subordinated  to  the  desire  to  reduce 
the  cost  of  living  to  its  lowest  level. ' ' 3  The  average  cost 
of  food  for  an  individual  immigrant  mine  worker  among 
these  races,  in  Pennsylvania,  in  prewar  days  was  said  to 
be  about  $4  to  $10  a  month.  Among  the  Italians  in  Boston, 
in  winter  months,  about  $1  a  week  was  sufficient  to  pay 
for  the  food  of  a  man.  In  clothing  equipment  the  recent 
immigrants  adopt  rather  quickly  American  standards,  but 
in  general  conditions  of  living  and  home  equipment  their 
standards  are  deplorable.  A  study  of  more  than  15,000 
foreign-born  wage-earners'  families  showed  that  one-tenth 
were  housed  in  two  rooms,  one-fifth  in  three  rooms,  and 
almost  one-third  in  four  rooms.  Many  of  the  households 

•Reports,  Vol.  I,  p.  499. 


Immigration  279 

of  the  new  immigrants  had  from  four  to  eight  persons  for 
each  sleeping  room,  the  maximum  number  of  inhabitants 
being  conditioned  only  by  available  space.  A  great  many 
used  all  the  rooms  of  their  apartments  for  sleeping  quarters. 

A  large  portion  of  immigrants  from  the  south  and  east 
of  Europe  are  single  or,  if  married,  have  left  their  wives 
in  the  old  country.  This  fact  has  made  possible  the  adop- 
tion of  the  group  system  instead  of  the  family  system  of 
living,  and  the  reduction  of  the  cost  of  living  to  a  point 
far  below  that  which  prevails  for  American  or  older  im- 
migrants in  the  same  occupations.  Under  this  system, 
known  as  the  "boarding  boss  plan,"  a  married  immigrant 
or  his  wife,  or  a  single  man,  is  the  head  of  the  household, 
in  addition  to  whom  there  are  anywhere  from  two  to  six- 
teen boarders  and  lodgers.  Each  lodger  pays  the  boarding 
boss  a  fixed  sum — $2  to  $3  a  month — for  lodging,  cooking, 
and  washing;  the  food  is  usually  bought  by  the  boarders 
themselves  or  by  the  boss  and  its  cost  is  shared  equally  by 
the  individual  members  of  the  group.  A  variation  of  this 
scheme  is  found  where  each  member  of  the  household  pur- 
chases his  own  food  and  has  it  cooked  separately.  Under 
this  method,  which  prevails  among  immigrant  households, 
the  entire  outlay  for  the  necessary  living  expenses  of  each 
adult  member  ranges  from  $9  to  $15  a  month.  Official 
investigations  have  shown  that  the  average  monthly  rent 
payment  per  person  for  immigrants  is  as  low  as  $1.51. 
Housing  conditions  among  recent  immigrants  are  unattrac- 
tive, the  ventilation,  cooking  facilities,  light,  water  supply, 
sanitation,  and  play  room  for  children  being  entirely  in- 
adequate. 

5.  Wages. — Recent  immigrants  constitute  a  mobile  wage- 
earning  class  because  large  numbers  of  them  have  no 
families  in  this  country.  Their  savings  are  in  the  form 
of  cash  or  are  quickly  convertible  into  cash,  so  they  can 
move  easily  to  the  communities  where  the  labor  market 
is  favorable.  Private  employment  agencies  find  these  labor- 
en  a  convenient  labor  reserve,  and  direct  them  rapidly  to 
localities  where  the  demand  is  active.  This  results  in  a 
flooding  of  the  market  and  a  depression  of  wage  standards, 


280  Immigration 

Eastern  and  southern  Europeans  have  manifested  a  dis- 
position to  accept  lower  wages  than  native  American  or 
older  immigrant  workmen. 

The  investigations  of  the  Immigration  Commission 
showed  that  of  26,616  adult  male  workers  for  whom  figures 
were  secured,  the  average  annual  earnings  of  22,928  adult 
foreign-born  wage-earners  were  only  $455,  as  contrasted 
with  $566  for  the  2,059  workers  of  native  birth  but  foreign 
father,  and  $666  for  the  1,454  native-born  whites.  Only 
a  small  percentage  of  the  native-born  Americans  were  earn- 
ing less  than  $400  a  year,  while  the  greater  proportion  of 
them  were  receiving  from  $600  to  $1,000.  Of  the  total 
number  of  foreign-born  wage-earners  studied,  approxi- 
mately 80  per  cent  were  receiving  less  than  $600  a  year, 
and  43  per  cent  earned  less  than  $400.  Only  1.9  per  cent 
of  the  foreign-born  males  earned  more  than  $1,000  a  year, 
as  compared  with  6.6  per  cent  of  the  native-born  of 
foreign  father,  and  11.4  per  cent  of  the  native-born  white 
Americans.  Everywhere  the  evidence  supported  the  con- 
tention that  the  earnings  of  native  Americans  exceed  those 
of  foreign-born  wage-earners,  and  the  earning  ability  of 
older  immigrants  exceeds  that  of  the  newer  ones.  It  is 
difficult  to  escape  the  conclusion  that  the  presence  of 
millions  of  immigrants  from  the  east  and  south  of  Europe 
has  depressed  the  wage  scale  in  some  American  industries 
and  prevented  an  advance  in  many  others. 

6.  The  Attitude  of  Immigrants  Toward  Labor  Organiza- 
tion.— The  recruitment  of  industrial  personnel  from  the 
races  that  have  constituted  the  bulk  of  recent  immigration 
has  undoubtedly  tended  to  weaken  the  labor  movement 
in  America,  and  in  some  industries  has  resulted  in  the 
disruption  of  labor  organization.  The  older  immigrant 
races  were  accustomed  to  trade  unionism  and  for  the  most 
part  had  had  experience  in  the  trade  union  movement 
abroad.  Upon  arriving  in  the  United  States,  these  in- 
dividuals were  not  slow  to  embrace  union  membership. 
It  has  been  quite  different  with  the  new  immigrants,  whose 
desire  to  accumulate  money  rapidly  has  made  them  un- 
willing to  participate  in  labor  disputes  involving  loss  of 


Immigration  281 

time  or  to  join  labor  organizations  to  which  it  is  necessary 
to  pay  dues.  Recent  immigrants  have  not  as  a  rule  affil- 
iated with  trade  unions  unless  compelled  to  do  so  as  a 
preliminary  step  toward  obtaining  work,  and  even  after 
becoming  members  they  have  not  manifested  great  in- 
terest in  the  progress  of  unionism,  many  of  them  refusing 
to  maintain  membership  for  any  length  of  time.  Union- 
ization of  the  steel  industry  and  many  others  has  been 
rendered  impossible  on  account  of  the  diversity  of  races 
and  nationalities  comprising  the  tractable  labor  force. 

The  attitude  of  American  labor  organizations  toward 
unionization  of  immigrant  workers  has  been  described  as 
"receptive,  aggressive,  and  at  times  coercive."  There  has 
been  a  wide  dissemination  of  information  concerning  the 
advantages  of  organization,  in  order  to  unionize  immi- 
grants. Sometimes  coercive  measures  have  been  used  to 
bring  them  into  the  unions,  especially  in  industries  where 
their  competition  has  injured  native  American  and  older 
immigrant  workers.  In  recent  years,  partly  because  of 
the  persistent  efforts  of  the  American  Federation  of  Labor 
and  partly  because  of  a  general  awakening  among  immi- 
grants as  to  the  benefits  of  unionism,  labor  organization 
has  met  with  greater  acceptance  among  the  foreign-born. 
In  the  clothing  industry  the  alien  workers  have  developed 
a  powerful  and  intelligent  type  of  unionism,  and  in  the 
steel  strike  of  1919  the  exploited  foreigners  gave  loyal 
support  in  the  unsuccessful  fight  for  collective  bargaining 
and  the  abolition  of  the  twelve-hour  day. 

7.  The  Financial  Status  of  Immigrants. — Immigrants 
applying  for  admission  to  the  United  States  are  not  re- 
quired to  state  how  much  money  they  bring  with  them 
unless  the  amount  is  under  $50,  but  most  immigrants  dis- 
close to  examining  officials  the  amounts  they  possess.  Of 
the  276,000  immigrant  aliens  who  showed  money  as  they 
entered  this  country  in  1920,  approximately  141,000  had 
less  than  $50  apiece.  The  average  amount  shown  by  all 
such  immigrants  in  1920  was  $119,  as  compared  with  $112 
in  1919,  and  $44  in  the  period  1910-1914.  The  amounts 
brought  in  are  insignificant  compared  with  the  remit- 


282  Immigration 

tances  sent  back  home  or  taken  back  by  immigrants  who 
have  been  in  this  country  for  some  time.  During  normal 
years  immigrants  remit  to  the  home  lands  from  $150,000,- 
000  to  $175,000,000,  and  in  years  of  great  industrial 
activity  when  wages  are  high  the  total  remittances  prob- 
ably exceed  $200,000,000.  Of  the  $275,000,000  estimated 
to  have  been  sent  to  Europe  by  immigrants  in  1907,  $85,- 
000,000  is  estimated  to  have  been  sent  to  Italy ;  $75,000,000 
to  Austria-Hungary ;  $25,000,000  to  Russia,  including  Fin- 
land ;  $25,000,000  to  Great  Britain  and  Ireland ;  $25,000,- 
000  to  Scandinavia;  $15,000,000  to  Germany;  $5,000,000 
each  to  Greece,  the  Balkan  states,  Japan,  and  China ;  and 
$5,000,000  to  certain  other  countries. 

Political  Elements  in  the  Problem.— The  influx  of  a 
heterogeneous  mass  of  races  and  nationalities  is  often  said 
to  be  a  potential  source  of  danger  for  American  institu- 
tions. Observation  of  naturalization  proceedings  in  Ameri- 
can courts  convinces  one  that  these  masses  have  a  verjj 
limited  appreciation  of  American  institutions  and  the  re- 
sponsibilities of  citizenship.  Incapable  of  voting  intelli- 
gently, large  numbers  of  them  are,  nevertheless,  granted 
the  privileges  of  suffrage  and  become  an  important  factor 
in  our  political  life.  It  can  hardly  be  said  that  the  new 
immigrants  generally  sell  their  votes,  but  large  numbers 
of  them  do  and  larger  numbers  are  under  the  control 
of  a  few  leaders  who  organize  and  direct  the  immigrant 
voting  power.  Ward  bossism  and  other  forms  of  political 
dictation  and  corruption  find  ready  acceptation  among 
them.  Moreover,  nationalities  and  interests  are  balanced 
against  each  other  by  the  political  machine,  and  the  vote 
of  the  foreign-born  is  often  a  sinister  influence  deter- 
mining the  tone  of  political  agitation  and  action.  The 
history  of  municipal  politics  in  the  United  States  is  re- 
plete with  evidence  of  the  catering  of  politicians  to 
the  vote  of  German,  Irish,  Greek,  and  other  groups  of 
racial  or  national  constituencies.  In  Congress  the  atti- 
tude of  members  on  international  questions  has  often  been 
influenced  by  the  strength  of  the  "foreign  vote,"  as  the 
discussion  of  Irish  independence  and  the  declaration  of 


Immigration  283 

war  on  Germany  attest.  Accustomed  to  despotic  or 
paternalistic  governments,  the  new  immigrants  do  not 
take  a  deep  interest  in  the  progress  of  democratic  institu- 
tions. 

Immigration  as  a  Factor  in  Illiteracy. — According  to 
the  1920  Census  the  United  States  has  4,931,905  persons 
ten  years  of  age  and  over,  who  are  illiterate;  in  1910 
there  were  5,516,163  such  persons.  The  Census  Bureau 
classifies  as  illiterate  any  person  ten  years  of  age  or  over 
who  is  unable  to  write  in  any  language,  not  necessarily 
English,  regardless  of  ability  to  read.  Generally  this  in- 
cludes those  persons  who  have  had  no  schooling. 

To  what  extent  is  immigration  responsible  for  this 
illiteracy?  In  1920,  2.5  per  cent  of  the  native  whites  of 
native  parentage  were  illiterate,  as  compared  with  less 
than  1  per  cent  for  native  whites  of  foreign  or  mixed 
parentage,  13.1  per  cent  for  foreign-born  whites,  and  22.9 
per  cent  for  negroes.  The  percentages  for  1910  were 
respectively,  3.7,  1.1,  12.7,  and  30.4  per  cent.  Thus 
foreign-born  whites  were  the  only  ones  who  showed  an 
increase  in  the  decade,  and  this  in  spite  of  the  fact  that 
a  literacy  test  has  been  applied  to  all  immigrants  coming 
to  the  United  States  since  1917.  That  immigration  is  an 
important  factor  in  the  problem  of  illiteracy  in  the  United 
States  is  seen  from  the  fact  that  in  1907,  30  per  cent 
of  the  total  number  of  immigrants  were  illiterate,  and  an 
average  of  25  per  cent  of  the  total  were  so  classified  for 
the  period  1910-1914.  Moreover,  it  is  apparent  that  illit- 
eracy among  immigrants  is  closely  associated  with  those 
who  come  from  eastern  and  southern  Europe.  In  1907, 
for  example,  when  30  per  cent  of  the  total  immigrants 
were  illiterate,  53  per  cent  of  the  southern  Italians,  40 
per  cent  of  the  Poles,  25  per  cent  of  the  Slovaks  from 
Austria  and  56  per  cent  of  the  Ruthenians  from  Austria, 
29  per  cent  of  the  Russian  Jews,  and  54  per  cent  of  the 
Syrians  were  illiterate.  In  the  same  year  the  percentage 
of  illiteracy  among  the  immigrants  from  northwestern 
Europe  was  comparatively  insignificant,  being  only  4  per 
cent  for  the  French,  4  per  cent  for  the  Germans,  3  per 


284  Immigration 

cent  for  the  Irish,  2  per  cent  for  the  English,  and  less 
than  1  per  cent  for  the  Scandinavians.  Children  of  all 
classes  of  immigrants  have  shown  a  marked  tendency  to 
literacy;  the  problem,  therefore,  is  a  temporary  one,  be- 
cause illiteracy  is  not  cumulative. 

The  Padrone  System. — The  term  "padrone"  implies  ab- 
solute authority  vested  in  some  persons  to  control  others, 
usually  laborers,  and  is  of  Italian  origin.  The  padrone 
has  the  right  to  prescribe  the  character  of  the  work,  in- 
crease or  decrease  wages  and  hours  of  labor,  punish  viola- 
tions of  contract,  and  adjust  differences  between  the 
workers.  In  the  United  States  the  padrone  system  devel- 
oped because  of  the  scarcity  of  labor  in  the  period  of 
expansion  following  the  Civil  War,  and  has  been  prac- 
ticed among  non-English  speaking  races.  In  the  majority 
of  cases  the  padrone  is  a  labor  agent,  who  agrees  to 
furnish  and  control  a  certain  supply  of  labor  in  return 
for  which  he  receives  specified  privileges,  such  as  the 
commissary  or  household  privileges  in  a  railway  or  con- 
struction camp.  In  other  cases  he  acts  merely  as  the 
representative  of  the  laborers  in  negotiations  with  em- 
ployers, and  for  this  service  each  laborer  in  the  gang 
pays  him  regularly  the  sum  agreed  upon.  Padrone  labor 
has  been  greatly  exploited  among  the  Italians,  Greeks, 
Mexicans,  Bulgarians,  Turks,  and  Syrians  in  the  United 
States.  Peddling,  shoe-shining,  mining,  and  other  occupa- 
tions have  been  invaded  by  the  padrone  system,  but  the 
constructive  efforts  of  foreign  governments,  and  organiza- 
tions of  foreigners  in  this  country  cooperating  with  our 
own  government  have  done  much  to  reduce  the  prevalence 
of  exploitation.  The  padrone  system  has  been  character- 
ized by  long  hours  and  close  confinement  to  work;  total 
disregard  of  the  necessity  of  fresh  air  and  proper  sleep- 
ing quarters;  overheated  and  poorly  ventilated  work 
places ;  lack  of  nourishing  food ;  inadequate  wearing  ap- 
parel ;  and  lack  of  bathing  facilities. 

The  Case  for  Restriction. — Restrictionists  rest  their  case 
upon  well-defined  industrial,  political,  social,  and  racial 
grounds.  Industrially,  it  is  contended,  the  entrance  into 


Immigration  285 

the  operating  forces  of  American  industries  of  millions 
of  people  from  eastern  and  southern  Europe  has  exposed 
the  original  employees  to  unsafe  and  unsanitary  working 
conditions;  introduced  a  standard  of  living  which  is  un- 
acceptable to  native  American  and  older  immigrant  work- 
ers ;  led  to  voluntary  or  involuntary  displacement  of  these 
workers  in  certain  industries  and  occupations;  weakened 
labor  organizations,  and  in  some  cases  disrupted  them; 
prevented  advances  in  wages  in  many  industries  and  de- 
pressed wage  scales  in  others ;  and  glutted  the  labor  mar- 
ket. Politically,  recent  immigrants  have  been  easy  prey 
for  the  corrupt  political  machine  in  American  cities ;  have 
hindered  the  development  of  national  unity;  and  ob- 
structed the  operation  of  our  democratic  institutions. 

The  social  arguments  for  restriction  have  their  founda- 
tion chiefly  in  the  unassimilability  of  recent  immigrants. 
They  are  clannish,  and  tend  to  form  colonies  of  their  own 
race  in  which  their  language,  customs,  and  ideals  arc 
preserved.  American  cities  have  quarters  referred  to  as 
"little  Italy,"  "little  Hungary,"  "little  Poland,"  and 
"little  Greece,"  which  are  divorced  from  the  finest  that 
is  available  in  American  institutions  and  civilization.  To 
these  colonies  the  new  immigrants  flock  in  large  numbers. 
In  1920  there  were  not  less  than  thirty-four  American 
cities  of  100,000  population  or  over,  in  which  the  foreign- 
born  whites  constituted  from  20  per  cent  to  40  per  cent 
of  the  total.  The  2,786,112  foreign-born  whites  in  the 
state  of  New  York  constituted  27  per  cent  of  the  popula- 
tion. Of  these  New  York  City  had  1,991,547,  or  71  per 
cent,  the  foreign-born  whites  constituting  35.4  per  cent 
of  its  total  population.  More  than  fifty  nations  were 
represented;  the  leading  nationalities  in  the  order  of 
their  numerical  strength  were  the  Russians,  Italians,  Ger- 
mans, Poles,  and  Austrians.  In  the  same  year  Illinois 
had  1,206,951  foreign-born  whites,  about  18.5  per  cent  of 
the  population.  Of  these  805,482,  or  67  per  cent,  were  in 
Chicago,  the  foreign-born  whites  accounting  for  approxi- 
mately 30  per  cent  of  the  population  of  the  city.  The 
Germans  led,  followed  by  the  Poles,  Russians,  and  Italians. 


£86  Immigration 

In  these  cities  the  eastern  and  southern  Europeans  segre- 
grate  in  racial  colonies.  Americanization  has  been  diffi- 
cult on  account  of  the  isolation  of  immigrant  groups; 
indifference,  and  often  prejudice,  on  the  part  of  natives 
toAvards  the  foreign-born;  illiteracy  among  immigrants; 
the  influence  of  immigrant  churches  and  parochial  schools 
in  emphasizing  racial  and  denominational  distinctions; 
and  the  inability  of  these  aliens  to  speak  English.  Immi- 
grants have  also  been  a  factor  in  such  social  problems 
as  crime,  poverty,  pauperism,  white  slavery,  bad  housing 
conditions,  insanity,  and  the  prevalence  of  contagious  dis- 
eases. 

A  great  deal  of  emphasis  has  been  placed  by  restriction- 
ists  upon  racial  arguments  against  immigration.  It  is 
pointed  out  that  the  new  immigration  is  drawn  from  the 
Slavic  and  Mediterranean  subraces  of  the  white  race, 
which  have  not  shown  the  capacity  for  self-government 
and  free  institutions  so  conspicuously  displayed  by  the 
northern  and  western  Europeans.  It  is  stated  that  the 
Latin  and  Slavic  temperaments  will  not  express  them- 
selves in  activities  and  institutions  identical  with  those 
cherished  by  the  Anglo-Saxon  and  Teutonic  races.  De- 
struction of  the  native  American  stock  by  the  new  immi- 
gration is  deplored. 

Those  who  oppose  policies  of  restriction  and  exclusion 
argue  that  America  does  not  suffer  from  an  oversupply 
of  unskilled  labor,  but  that  the  supply  of  cheap  labor 
furnished  by  the  recent  immigrant  tide  is  indispensable 
if  this  country's  capitalists  are  to  develop  American  in- 
dustries rapidly,  dominate  the  world  markets,  and  in- 
crease the  national  wealth.  The  immigrant  workman  is 
declared  to  be  necessary  to  national  progress,  since  we 
can  rely  on  no  one  else  to  build  our  houses,  railroads, 
subways,  and  waterways,  and  mine  our  coal  and  ore.  The 
American  and  older  immigrant  workers  are  said  to  be 
pushed  up  and  not  down  by  the  influx  of  recent  immi- 
grants, and  the  social,  political,  and  racial  problems  to 
be  solved  automatically  with  the  second  generation. 
America  is  said  to  need  the  artistic  temperament  of  the 


Immigration  287 

Slavic  and  the  Latin  races.  All  restrictive  measures,  ex- 
cept those  designed  to  protect  public  health  and  morals, 
are  condemned  as  arbitrary,  utterly  un-American,  a  viola- 
tion of  our  treaties  with  foreign  powers,  and  absolutely 
unjustified  by  the  effects  of  immigration.  Nothing,  in 
fact,  justifies  the  departure  from  the  open  door  policy 
advocated  by  Thomas  Jefferson  in  his  message  of  1801, 
dedicating  the  United  States  as  the  free  asylum  of  op- 
pressed humanity.  Regardless  of  this  opposition,  the 
United  States  has  adopted  an  increasingly  restrictive 
policy. 

The  Development  of  Opposition  and  Legislation. — Al- 
though the  first  general  immigration  act  of  the  United 
States  was  not  passed  until  1882,  opposition  to  immigra- 
tion crystallized  in  earlier  years.  Washington,  John 
Adams,  and  other  early  American  statesmen  were  opposed 
to  the  uncontrolled  influx  of  aliens,  a  fact  which  un- 
doubtedly accounts  for  the  qualifications  prescribed  for 
membership  in  either  house  of  Congress  and  for  the  presi- 
dency. Prior  to  1861,  however,  regulation  was  left  to 
the  states,  although  the  federal  government  passed  a  law 
in  1819  for  the  purpose  of  providing  greater  comfort  and 
convenience  for  steerage  passengers  en  route  to  this 
country. 

Immigration  from  Germany  and  Ireland  increased  in 
the  thirties,  and  nativistic  tendencies  became  more  pro- 
nounced. There  soon  developed  the  so-called  "Native 
American"  movement,  founded  principally  on  opposition 
to  the  immigration  of  Roman  Catholics,  which  assumed  a 
political  significance.  A  native  American  party,  known 
as  the  American  Republican  Party,  was  organized,  and 
in  1845  the  movement  claimed  a  membership  of  110,000 
in  New  York,  Pennsylvania,  Massachusetts  and  other 
states,  and  was  represented  in  Congress  by  eight  members. 
That  was  the  year  of  the  first  national  convention  in 
Philadelphia,  at  which  the  141  delegates  assembled 
adopted  a  platform  demanding  the  repeal  of  the  natural- 
ization laws  and  the  appointment  to  office  of  native  Amer- 
icans. Nativistic  representatives  in  Congress  demanded 


288  Immigration 

the  exclusion  of  undesirable  aliens  and  a  longer  term  of 
residence  prior  to  naturalization,  but  they  had  little 
success. 

The  decade  of  the  forties  witnessed  another  wave  of 
immigration  from  Ireland  and  Germany  on  account  of 
the  potato  famine  in  the  former  country  and  political 
disruption  in  the  latter.  Fear  of  the  alien  again  spread 
and  the  nativists  revived  anti-Catholic  activities.  A  new 
organization  clothed  in  secrecy  and  mysticism  was  created 
in  New  Tork  City  in  1850.  When  questioned  concerning 
the  nature  of  the  order  its  members  would  answer:  "I 
don't  know,"  and  this  gave  rise  to  the  name  "Know 
Nothing  Party."  By  1854,  however,  the  secret  character 
of  the  organization  had  been  largely  discarded  and  its 
real  name — the  Order  of  the  Star  Spangled  Banner — 
became  generally  known.  Slavery,  religious  liberty,  and 
the  moral  welfare  of  the  nation  were  among  the  issues 
commanding  its  attention.  Following  the  national  council 
held  in  Philadelphia  in  1855,  direct  political  activity  was 
sponsored;  the  movement  demanded  a  change  in  the 
naturalization  laws  and  the  repeal  of  state  laws  allowing 
foreigners  not  naturalized  to  vote.  The  convention  of 
1856  went  on  record  in  favor  of  government  of  America 
by  Americans,  a  twenty-one-year  residence  requirement 
for  naturalization,  and  the  exclusion  of  paupers  and 
criminals.  Although  it  nominated  a  presidential  candidate 
and  had  several  members  in  Congress,  the  "Know  Nothing 
Party"  accomplished  practically  nothing  toward  the  ex- 
clusion of  immigrants.  In  fact,  in  1847  and  1848,  when 
the  party  was  increasing  in  power,  Congress  amended  the 
law  of  1819  in  order  to  improve  steerage  conditions  on 
passenger  ships. 

Conditions  incident  to  the  Civil  War  caused  a  complete 
change  in  public  sentiment  concerning  immigration.  In 
1864  Congress  passed  a  law  to  encourage  immigration  as 
a  means  of  filling  up  the  vacancies  of  the  million  and  a 
quarter  employees  who  had  left  industries  for  military 
service.  Under  the  provisions  of  this  act  the  office  of 
Commissioner  of  Immigration  was  created  in  the  State 


Immigration  289 

Department,  and  immigrants  were  permitted  to  pledge 
under  contract  not  more  than  one  year's  service  in  pay- 
ment for  passage,  but  servitude  was  forbidden.  This  law 
proved  unsatisfactory  and  was  repealed  in  1868,  leaving 
the  states  to  meet  the  problem  in  their  own  way.  State 
control  proved  inadequate,  however,  and  there  was  a 
strong  movement  for  federal  regulation  culminating  in 
the  decision  of  the  United  States  Supreme  Court  in  1876, 
which  declared  state  regulation  of  immigration  uncon- 
stitutional. In  1875  and  1882  federal  laws  were  passed 
to  keep  out  persons  considered  detrimental  to  the  public 
welfare,  including  prostitutes,  convicts  (except  political 
offenders),  lunatics,  idiots,  and  persons  likely  to  become 
public  charges,  the  provisions  of  earlier  laws  with  regard 
to  undesirables  being  greatly  strengthened.  The  Secre- 
tary of  the  Treasury  was  given  power  to  enforce  the  law 
of  1882,  and  a  head  tax  of  fifty  cents  was  imposed  to 
provide  funds  for  its  administration.  The  importation  of 
contract  labor  was  forbidden  by  the  act  of  1885;  more 
effective  measures  providing  for  the  deportation  of  immi- 
grants landed  in  violation  of  the  law  were  passed  in  1887 
and  1888. 

During  1890  one  or  more  political  parties  in  twenty- 
three  states  demanded  additional  regulation  of  immi- 
gration, and  in  1891  Congress  passed  another  meas- 
ure excluding  persons  afflicted  with  loathsome  disease, 
polygamists,  those  whose  passage  was  paid  for  by  others, 
and  paupers.  The  solicitation  or  encouragement  of  im- 
migration by  promising  employment  through  advertise- 
ments in  foreign  countries  was  forbidden,  the  office  of 
Superintendent  of  Immigration  was  created,  and  adminis- 
trative powers  formerly  delegated  to  the  states  were  now 
transferred  to  federal  departments.  Moreover,  the  law 
provided  for  the  inspection  of  vessels  carrying  immigrants 
and  the  examination  of  immigrants  on  the  borders  of 
Canada  and  Mexico,  and  required  transportation  com- 
panies bringing  in  legally  inadmissible  aliens  to  bear  the 
expense  of  returning  such  persons  to  the  ports  of  em- 
barkation. The  industrial  depression  in  1893  led  to  agita- 


Immigration 

tion  for  further  restriction  of  immigration,  but,  with  the 
exception  of  an  amendment  to  an  appropriation  act  in 
1894,  raising  the  head  tax  on  immigrants  from  fifty  cents 
to  one  dollar,  no  further  legislation  was  passed  until  1903. 
A  bill  adopted  by  both  houses  of  Congress  providing  for 
an  educational  test  for  immigrants  was  vetoed  by  Presi- 
dent Cleveland  on  March  2,  1897. 

On  March  3,  1903,  a  law  was  passed  embodying  many 
of  the  recommendations  of  the  United  States  Industrial 
Commission.  This  law  added  to  the  excluded  classes 
epileptics,  persons  who  had  been  insane  within  five  years 
previous  or  had  had  two  or  more  attacks  of  insanity, 
professional  beggars,  anarchists,  persons  attempting  to 
bring  in  women  for  immoral  purposes,  and  persons  de- 
ported within  a  year  previous  as  contract  laborers.  The 
head  tax  was  increased  from  $1.00  to  $2.00,  and  provision 
was  made  for  the  codification  of  all  immigration  legisla- 
tion enacted  between  1875  and  1894.  In  1903  also  the 
Department  of  Commerce  and  Labor  was  created,  and  the 
office  of  Commissioner  General  of  Immigration  was  placed 
in  this  department.  In  1907  a  law  was  enacted  which, 
among  other  provisions,  increased  the  head  tax  to  $4.00, 
required  greater  air  space  for  steerage  passengers,  and 
gave  to  the  president  power  to  refuse  admittance  to  cer- 
tain aliens  whose  presence  would  affect  adversely  condi- 
tions of  labor.  Under  the  last  provision  Japanese  and 
Korean  laborers  were  excluded  later.  This  measure  also 
created  the  United  States  Immigration  Commission  whose 
investigations,  published  in  1911,  constitute  the  standard 
authority  on  the  subject. 

In  1910  an  act  was  passed  for  the  purpose  of  making 
more  effective  previous  legislation  against  the  importation 
of  women  and  girls  for  immoral  purposes  and  providing 
punishment  for  persons  controlling  and  importing  such 
undesirables.  In  1913  President  Taft  vetoed  a  bill  which 
provided  a  literacy  test  for  immigrants.  A  similar 
measure  was  vetoed  twice  by  President  Wilson,  once  in 
1915  and  again  in  1916,  but  in  the  last  instance  the  re- 
quired two-thirds  majority  vote  was  secured  in  both  houses 
and  Congress  passed  the  bill  over  the  president's  veto. 


Immigration 

It  became  a  law  on  February  5,  1917.  Persons  over  six- 
teen years  of  age  who  are  physically  capable  of  reading 
are  excluded  if  they  cannot  read  some  language,  but 
exceptions  are  made  in  the  case  of  near  relatives  of 
admissible  aliens  and  those  seeking  admission  to  escape 
religious  persecution.  President  Wilson  objected  to  the 
measure  on  the  grounds  that  it  embodied  a  radical  de- 
parture from  the  traditional  policy  of  the  nation  in  almost 
destroying  the  right  of  political  asylum  and  in  excluding 
those  who  have  missed  the  opportunity  of  education,  with- 
out regard  to  their  character  or  capacity,  and  did  not 
represent  the  will  of  the  people.  The  1917  law  increased 
the  head  tax  to  $8.00,  payable  by  every  alien  entering 
the  United  States  except  children  under  sixteen  years  of 
age  accompanying  their  parents. 

Out  of  348,111  immigrant  aliens  sixteen  years  of  age 
or  over  admitted  in  1920,  only  about  15,000,  or  4.4  per 
cent,  were  illiterate,  these  being  allowed  to  enter  under 
the  prescribed  exceptions.  The  literacy  test,  however,  is 
not  very  difficult.  On  June  3,  1921,  a  percentage  law 
became  operative,  which  provides  that  the  number  of 
aliens  of  any  nationality  who  may  enter  in  any  year 
shall  be  limited  to  3  per  cent  of  the  number  of 
foreign-born  persons  of  such  nationality  already  resident 
in  the  United  States,  as  determined  by  the  Census 
of  1910.  Large  numbers  of  aliens  were  refused  entrance 
because  the  quota  of  their  nationality  was  filled  for  the 
year.  These  were  described  as  "helpless  victims  of  the 
transportation  companies  whose  greed  brought  them  here 
in  flagrant  disregard  of  the  limitations  of  the  law."  4  The 
Department  of  Labor,  listening  to  the  appeals  of  relatives 
and  friends,  admitted  temporarily  these  excess  arrivals, 
and  later  Congress  made  the  order  permanent  by  charg- 
ing the  excess  against  the  quotas  of  the  nationalities  in- 
volved, for  the  following  year.  It  is  estimated  that  this 
act  will  limit  the  total  immigration  from  Europe  and  other 
countries  in  the  fiscal  year  1922  to  about  350,000  persons.9 

4  Ninth  Annual  Report  of  the  Secretary  of  Labor,  1921,  p.  29. 
•Ibid.,  p.  30. 


292  Immigration 

Because  of  the  difficulties  of  administering  it,  there  was 
much  agitation  for  the  repeal  of  this  law  and  the  enactment 
of  a  temporary  exclusion  measure  to  relieve  the  congested 
labor  market.  The  original  percentage  act  expired  June 
30,  1922,  but  Congress  amended  and  extended  the  law  to 
June  30,  1924.  A  fine  of  $200  is  imposed  upon  steamship 
companies  that  bring  in  aliens  in  excess  of  the  quota,  and 
passage  money  must  be  refunded  by  the  company  to 
aliens  who  are  refused  admission  for  this  reason.  The 
head  tax  levied  and  collected  on  aliens  during  the  fiscal 
year  1921  amounted  to  $5,697,528.  The  immigration 
authorities  at  the  several  ports  of  entry  also  assessed 
$325,340  in  administrative  fines  against  transportation 
companies,  or  the  masters,  owners,  or  agents  of  vessels 
entering  our  ports.  The  cost  of  operating  the  Immigra- 
tion Service  for  the  year  was  $3,898,733 ;  thus  the  govern- 
ment received  a  net  revenue  of  $2,057,163  from  the 
enforcement  of  the  immigration  laws  in  the  fiscal  year 
1921. 

Oriental  Immigration. — The  problem  of  Chinese,  Japa- 
nese, and  Hindu  immigration  has  peculiarities  not  asso- 
ciated with  immigration  from  Europe.  In  race  and 
civilization  Orientals  differ  greatly  from  the  peoples  of 
western  countries.  Difficult  as  is  the  assimilation  of 
Orientals  from  a  racial  standpoint,  it  is  almost  as  difficult 
from  the  point  of  view  of  the  standard  of  life.  Com- 
paratively few  Hindus,  Chinese,  and  Japanese  who  emi- 
grate from  their  native  countries  appear  to  change  their 
modes  of  living.  They  can  live  even  more  cheaply  than 
eastern  and  southern  Europeans,  and  for  this  reason 
American  workmen  fear  competition  with  them  more  than 
they  do  competition  with  the  latter  races  and  nationali- 
ties. Orientals  accept  wages  that  to  native  Americans  and 
to  older  immigrants  would  mean  starvation. 

The  number  of  Orientals  in  the  United  States  is  not 
BO  great  as  to  cause  serious  alarm,  there  being  only  about 
62,000  Chinese  and  111,000  Japanese  in  this  country  in 
1920.  The  Chinese  constitute  less  than  one-tenth  of  one 
per  cent,  and  the  Japanese  about  one-tenth  of  one  per 


Immigration  293 

cent  of  the  total  population.  In  1900  there  were  almost 
90,000  Chinese  and  about  24,000  Japanese  in  this  country, 
which  means  that  in  twenty  years  the  number  of  Chinese 
has  decreased  28,000,  or  31  per  cent,  while  the  number 
of  Japanese  has  increased  87,000  or  362  per  cent.  Between 
10,000  and  12,000  Japanese  aliens  and  about  4,000  Chinese 
aliens  enter  annually,  but  a  considerable  number  of 
Chinese,  not  shown  in  the  statistics  of  immigration,  gain 
entrance  to  the  United  States  by  deserting  from  vessels 
upon  which  they  have  arrived  as  crew  members,  and  en- 
tering surreptitiously  across  our  land  borders,  or  being 
smuggled  in  at  various  remote  places  on  our  seacoasts. 
The  so-called  "seaman  route"  has  apparently  become  a 
favorite  device  for  defeating  the  purpose  of  the  Chinese 
exclusion  laws. 

In  general  Chinese  tend  to  concentrate  in  domestic  and 
personal  service,  gardening,  laundering,  railroad  construc- 
tion, canning,  etc.,  while  Japanese  are  found  in  domestic 
and  personal  service,  trade  and  transportation,  and  agri- 
culture. Unable  to  compete  in  agricultural  pursuits,  the 
Chinese  are  going  into  lumber  mills,  logging  camps,  and 
construction  work  in  the  West.  American  labor  views 
with  alarm  the  facts  that  Japanese  immigration  has  in- 
creased 362  per  cent  in  twenty  years;  that  Chinese  are 
entering  the  country  illegally  in  large  numbers ;  and  that 
both  nationalities  encroach  upon  employments  hitherto 
claimed  by  white  labor.  The  1921  convention  of  the  Amer- 
ican Federation  of  Labor  went  on  record  in  favor  of 
abolishing  the  "gentlemen's  agreement"  with  Japan  and 
of  adopting  complete  exclusion  of  Japanese  together  with 
all  other  Orientals.  Strict  enforcement  of  the  Chinese 
Exclusion  Act  was  demanded. 

The  economic  consequences  of  the  presence  of  Oriental 
laborers  is  no  small  factor  in  the  waves  of  race  prejudice 
which  have  swept  periodically  over  our  Pacific  coast  states, 
especially  California.  Both  Chinese  and  Japanese  have 
been  the  victims  of  race  prejudice,  and  laws  have  been 
passed  excluding  Orientals  from  land  ownership.  Op- 
ponents of  Asiatic  immigration  contend  that  these  immi- 


294  Immigration 

grants  endanger  'American  industrial  and  social  standards 
and  their  presence  discourages  the  immigration  of  white 
labor,  in  the  same  way  as  does  the  presence  of  the  negro 
in  the  South.  The  principal  charges  are  that  the  Chinese 
and  Japanese  are  nonassimilable  biologically,  and  that 
they  do  not  constitute  desirable  additions  to  the  popula- 
tion because  of  the  great  differences  in  religion  and  cus- 
toms, and  their  divided  allegiance.  Even  though  born 
in  the  United  States,  and  therefore  citizens,  it  is  stated 
that  all  Japanese  are  regarded  by  the  Japanese  govern- 
ment as  subjects  of  Japan,  and  are  watched  over  by  the 
Japanese  consulate.  Moreover,  children  of  Japanese  are 
required  to  attend  Japanese  schools  after  daily  attendance 
at  American  public  schools,  and  all  Japanese  between  the 
ages  of  17  and  40  are  subject  to  conscription  in  the 
Japanese  army.  The  Japanese  concentrate  in  localities' 
from  which  they  force  out  white  inhabitants,  and  secure 
land  ownership  in  violation  of  the  law.  Land  is  pur- 
chased in  the  names  of  their  children  or  by  corporations 
in  which  white  men  act  as  dummy  directors.  In  many 
localities  the  most  arable  land  has  fallen  into  the  hands 
of  the  Japanese.  The  practice  of  bringing  in  the  so-called 
"picture  brides"  has  aroused  much  public  sentiment 
against  the  Japanese  in  California,  on  the  ground  that 
this  constitutes  an  evasion  of  the  "gentlemen's  agree- 
ment." 

Those  who  oppose  restriction  of  immigration  from  the 
Orient  point  out  that  Orientals  comprise  an  insignificant 
percentage  of  the  total  population  and  their  birth  rate  is  no 
higher  than  other  classes  of  immigrants.  Moreover,  it  is  the 
industry  and  patience  of  the  Japanese  that  have  been  re- 
sponsible for  the  reclamation  of  waste  and  unused  lands 
which  they  have  made  very  fertile — land  that  native 
Americans  would  not  cultivate  because  of  the  attendant 
difficulties. 

The  first  attempt  of  the  federal  government  to  regulate 
Chinese  immigration  is  found  in  the  Burlingame  treaty 
of  July  28,  1868.  Little  was  accomplished  by  this  treaty 
because  it  merely  expressed  the  right  of  the  Chinese  to 


Immigration  £95 

settle  wherever  they  wished  but  denied  them  the  right 
of  naturalization.  A  treaty  negotiated  in  1880  authorized 
the  United  States  government  to  regulate,  limit,  or  sus- 
pend immigration  from  China,  but  not  to  prohibit  such 
immigration.  In  1882  the  Chinese  Exclusion  Act  was 
passed,  which  suspended  all  Chinese  skilled  and  unskilled 
labor  for  a  period  of  ten  years.  In  1904,  when  the  Chinese 
government  refused  to  continue  the  treaty  of  1894  pro- 
viding for  the  exclusion  of  Chinese  labor  for  ten  years, 
Congress  reenacted  the  law  of  1882,  extending  and  con- 
tinuing without  modification,  limitation,  or  condition  all 
laws  then  in  force  so  far  as  they  were  not  inconsistent 
with  treaty  obligations.  This  gave  permanence  to  the 
Chinese  exclusion  policy  of  our  government.  Classes  ex- 
empt under  the  law  include  officials  of  the  Chinese  govern- 
ment, teachers,  students,  merchants,  travelers;  laborers 
coming  to  join  lawful  wives,  children,  or  parents,  or  to 
claim  property  or  debts ;  and  the  wives  and  minor  children 
of  members  of  these  exempt  classes.  Exempted  persons 
must  produce  identification  by  their  own  government 
vis6d  by  a  diplomatic  or  consular  agent  of  the  United 
States.  The  law  has  been  very  difficult  to  enforce. 

In  accordance  with  the  "gentlemen's  agreement"  en- 
tered into  by  the  governments  of  the  United  States  and 
Japan  in  1907,  Japanese  laborers  who  are  not  coming 
to  the  United  States  to  resume  a  formerly  acquired 
domicile;  to  join  a  parent,  wife,  or  children  residing  here; 
or  to  assume  active  control  of  an  already  possessed  in- 
terest in  a  farming  enterprise  are  refused  passports  by 
the  Japanese  government.  Fictitious  business  partner- 
ships have  been  a  favorite  means  of  evading  this  under- 
standing, and  a  great  deal  of  criticism  has  arisen  to  the 
effect  that  Japan  is  not  living  up  to  the  agreement.  A 
new  treaty  signed  in  1911  omits  all  reference  to  immigra- 
tion, but  the  Japanese  government  has  declared  officially 
that  it  is  fulfilling  its  responsibilities  under  the  agreement 
of  1907,  and  that  emigration  from  Japan  is  limited  to  the 
movement  of  Japanese  laborers  to  Hawaii.  The  1913  anti- 
alien  land  ownership  law  of  California  and  the  introduc- 


296  Immigration 

tion  of  similar  measures  in  the  legislatures  of  other  Pacific 
coast  states  have  tended  to  strain  relations  between  Japan 
and  the  United  States. 

Our  immigration  policy  with  regard  to  Orientals  is 
criticized  by  many  who  contend  that  it  is  fundamentally 
unjust  to  discriminate  against  Asiatic  peoples.  Such  dis- 
crimination, it  is  maintained,  is  humiliating  to  Asiatics, 
promotes  race  prejudice  and  suspicion,  disregards  the 
rules  of  international  comity,  and  is  economically  detri- 
mental to  the  United  States.  Identical  treatment  of  all 
immigrants  both  in  political  and  in  economic  relations  is 
urged  on  the  grounds  that  individual  qualifications,  not 
race,  should  be  the  basis  of  citizenship,  and  that  such  action 
is  necessary  to  retain  the  friendship  of  Oriental  nations 
and  to  enhance  our  commercial  prestige  in  the  Orient. 

Conclusions. — Unregulated  immigration  is  a  serious 
menace  to  American  social,  economic,  and  political 
standards.  No  nation  can  assimilate  readily  such  vast 
numbers  as  have  entered  the  United  States  during  the 
last  forty  years.  Our  immigration  policy,  like  every  policy 
d«signed  to  promote  the  public  welfare,  must  be  shaped 
in  the  light  of  national  expediency  rather  than  according 
to  abstract  theories  of  rights,  freedom,  and  asylum.  If 
Oriental  immigration  is  more  menacing  to  our  institu- 
tions than  European  immigration  that  is  sufficient  reason 
for  the  exclusion  of  the  former,  but  there  must  be  ade- 
quate basis  for  judgment  with  regard  to  the  effects  of 
both  types  of  immigration.  Self-preservation  is  the  first 
law  of  life,  and  it  applies  to  nations  as  to  individuals. 
If  American  economic,  political,  and  social  standards  are 
threatened  by  an  excessive  influx  of  aliens,  it  is  the  duty 
of  the  federal  government  to  control  that  influx  and  in 
periods  of  acute  unemployment  to  adopt  a  policy  of  com- 
plete exclusion. 


SELECTED  REFERENCES 
General 

COMMONS,  J.  R.,  Eaces  and  Immigrants  in  America,  1907. 
FAIRCHILD,  H.  P.,  Immigration,  1913. 


Immigration  297 

HALL,  P.  F.,  Immigration  and  Its  Effects  Upon  the  United 

States,  1906. 

HOURWICH,  I.  A.,  Immigration  and  Labor,  revised  edition,  1922. 
JENKS,  J.  W.,  AND  LAUCK,  W.  J.,  The  Immigration  Problem, 

fourth  edition,  1917. 

ROBERTS,  PETER,  The  New  Immigration,  1912. 
Ross,  E.  A.,  The  Old  World  in  the  New,  1914. 
UNITED  STATES  IMMIGRATION  COMMISSION,  Reports,  1909-1911. 
UNITED  STATES  INDUSTRIAL  COMMISSION,  Reports,  Vols.  XV 

and  XIX,  1901,  1902. 

WARNE,  F.  J.,  The  Immigrant  Invasion,  1913. 
Industrial  Aspects 
CARLTON,  F.  T.,  The  History  and  Problems  of  Organized  Labor, 

revised  edition,  1920,  Chap.  XII. 
COMMONS,  J.   R.,  Races  and  Immigrants  in  America,  1907, 

Chaps.  V  and  VI. 
JENKS,  J.  W.,  AND  LAUCK,  W.  J.,  The  Immigration  Problem, 

1917,  Chaps.  IX-XII. 

LESCOHIER,  D.  D.,  The  Labor  Market,  1919,  Chap.  I. 
MITCHELL,  JOHN,  Organized  Labor,  1903,  Chap.  XXI. 
Ross,  E.  A.,  The  Old  World  in  the  New,  1914,  Chap.  IX. 
UNITED  STATES  IMMIGRATION  COMMISSION,  Reports,  Vols.  I 

and  II,  1909-1911. 
UNITED  STATES  INDUSTRIAL  COMMISSION,  Reports,  15:295-316, 

385-448,  647-722;  19:967-1030,  1901,  1902. 
WALKER,  F.  A.,  Discussions  in  Economics  and  Statistics,  1899, 

2:417-451. 

Chinese  and  Japanese 

AMERICAN  ACADEMY  OF  POLITICAL  AND  SOCIAL  SCIENCE,  PHILA- 
DELPHIA, Annals,  Vol.  XXXIV,  Sept.,  1909;  Vol.  XC1II, 

Jan.,  1921. 

COOLIDGE,  Mrs.  M.  E.  B.,  Chinese  Immigration,  1909. 
QULICK,  S.  L.,  The  American  Japanese  Problem,  1914. 
ITENAGA,  TOYOKICHI  AND  SATO,  KENOSKE,  Japan  and  the  Cali- 
fornia Problem,  1921,  Chaps.  VII-X. 
UNITED  STATES  IMMIGRATION  COMMISSION,  Reports,  1 :617-G94, 

1909-1911. 
UNITED  STATES  INDUSTRIAL  COMMISSION,  Reports,  15:747-802, 

1901. 

Legislation 
JENKS,  J.  W.,  AND  LAUCK,  W.  J.,  The  Immigration  Problem, 

1917,  Chaps.  XVI-XVIII. 
UNITED   STATES   BUREAU   OF   IMMIGRATION,  Annual  Reports, 

1892-date. 
UNITED  STATES  IMMIGRATION  COMMISSION,  Reports,  2 :557-584, 

1900-1911. 


CHAPTER  XIV 

INDUSTRIAL  UNREST 

An  Inclusive  Problem. — The  importance  of  the  problem 
of  industrial  unrest  is  suggested  by  the  almost  ceaseless 
attention  which  modern  communities  are  forced  to  give 
to  it.  In  periods  of  industrial  expansion  and  general 
economic  prosperity  conflicts  in  industrial  relations 
emerge  to  slow  up  the  machinery  of  production  and  im- 
pede material  progress,  while  in  times  of  industrial  in- 
activity and  business  depression  the  economic  and  social 
problems  incident  thereto  are  made  more  acute  by  the 
endless  strife  between  employers  and  employees.  Indus- 
trial unrest  is,  in  fact,  the  all-inclusive  problem  of  modern 
industrialism.  In  it  is  contained  and  through  it  are  mani- 
fested all  the  elements  of  industrial  maladjustment  dis- 
cussed in  the  previous  chapters.  The  standard  of  life, 
cost  of  living,  industrial  remuneration,  conditions  of  labor, 
women  and  children  in  industry,  unemployment,  occupa- 
tional hazards,  labor  turnover,  distribution  of  wealth  and 
income,  and  immigration  are  the  numerous  problems  that 
converge  to  produce  the  comprehensive  phenomenon  of 
industrial  and  social  unrest.  If  this  fact  is  kept  in  mind, 
it  will  aid  in  the  appreciation  of  another  fact  which  modern 
communities  have  failed  to  apprehend  in  its  full  import ; 
namely,  that  industrial  and  social  unrest  is  symptomatic 
of  remediable  conditions  in  our  industrial  system.  Repe- 
titious strikes,  boycotts,  lockouts,  and  disputes  are  indica- 
tive of  wrongs  that  can  be  righted,  of  conditions  of 
work  and  methods  of  management  that  must  be  improved 
if  the  community  is  to  escape  the  endless  struggle  between 
capital  and  labor.  Superficial  condemnation  of  labor  ancl 
capital  will  not  solve  the  problem ;  there  must  be  impartial 

.298, 


Industrial  Unrest  299 

investigation  and  a  critical  analysis  of  facts  combined 
with  a  determination  to  eliminate  the  conditions  respon- 
sible for  industrial  frietion. 

There  is  nothing  new  about  industrial  unrest,  except 
its  present  extensiveness  and  effects.  The  slave  and  serf 
rebelled  against  their  subordinate  status  in  the  economic 
order,  and  the  free  wage-earner  also  protests  against  con- 
ditions which  he  deems  undesirable.  The  development  of 
modern  capitalism,  however,  has  been  characterized  by 
increasing  discontent  on  the  part  of  the  masses,  and  in- 
dustrial unrest,  which  has  now  become  world-wide  in 
scope,  appears  to  have  a  more  emphatic  accent  as  the 
wage-earners  increase  in  intelligence.  The  demands  of 
the  masses  are  more  far-reaching  and  more  determined 
to-day  than  at  any  other  period  of  the  world's  history. 
Whereas  industrial  strife  was  in  the  beginning  of  modern 
capitalism  confined  to  sporadic  protests  against  unsatis- 
factory conditions  in  local  areas,  in  the  present  generation 
it  finds  more  general  expression  and  develops  from  more 
comprehensive  causes.  Strikes  and  lockouts  in  the  present 
stage  of  economic  development  may  cause  a  complete 
shutdown  of  basic  industries,  paralyze  transportation,  and 
expose  the  public  to  immeasurable  injury  and  incon- 
venience. General  strikes  and  lockouts  may  imperil 
national  life,  and  nations  fear  them  as  never  before,  be- 
cause a  revolt  of  the  masses  in  another  country,  as  in 
Russia,  rocks  the  foundations  of  national  institutions 
everywhere. 

Definitions. — Industrial  unrest  manifests  itself  in  such 
practices  as  strikes,  boycotts,  lockouts,  and  blacklists.  A 
strike  is  a  cessation  of  work  by  a  combination  of  wage- 
earners  for  the  purpose  either  of  enforcing  certain  demands 
for  improved  conditions  of  employment,  or  of  maintaining 
conditions  that  already  exist.  From  the  point  of  view  of  the 
wage-earners  strikes  may  be  positive  or  negative,  depending 
upon  the  conditions  that  give  rise  to  the  cessation  of  work. 
If  the  strike  is  initiated  by  the  employees  for  the  purpose 
of  making  effective  their  demands  for  improved  conditions 
of  labor,  it  may  be  said  to  be  a  positive  one.  If,  on  the 


300  Industrial  Unrest 

other  hand,  the  concerted  agreement  on  the  part  of  the 
employees  to  stop  work  is  an  effort  to  maintain  prevailing 
standards  of  wages,  hours,  and  physical  conditions  of  em- 
ployment, the  strike  is  really  a  protest  against  changes 
initiated  by  the  employer,  and  may  be  called  a  negative 
strike.  Another  classification  of  strikes  is  that  proposed 
by  the  Massachusetts  Bureau  of  Labor,  according  to  which 
cessation  of  work  resulting  from  the  initiative  of  employers 
in  effecting  readjustments  in  the  conditions  of  employment 
is  known  as  a  "defense  strike,"  and  a  cessation  of  com- 
binations of  employees  for  the  purpose  of  securing  better 
conditions  of  employment  is  called  an  "attack  strike."  It 
will  be  seen  that  the  "attack  strike"  corresponds  to  the 
positive  strike,  while  the  "defense  strike"  is  similar  to  the 
negative  strike.  In  both  classifications  the  nature  of  the 
strike  depends  upon  which  of  the  parties,  employer  or  em- 
ployees, is  the  originator  of  the  demands  that  cause  the 
cessation  of  work. 

Strikes  may  be  local,  national,  or  international.  Local 
strikes  may  be  operative  in  a  particular  plant  or  group 
of  plants  in  a  given  trade  or  occupation  in  a  limited  area, 
as  a  city,  state,  or  district ;  national  strikes  are  those  which 
take  place  in  a  whole  industry,  such  as  coal  mining  or 
transportation,  and  are  operative  throughout  the  whole 
country;  an  international  strike  is  one  that  ties  up  an 
industry  in  more  than  one  nation,  such  as  a  concerted  stop- 
page of  work  in  the  same  industry  in  the  United  States  and 
Canada.  In  recent  years  the  term  "general  strike"  has  in- 
vaded the  vocabulary  of  economics,  used  chiefly  by  radical 
elements  in  the  international  labor  movement  to  designate 
a  complete  cessation  of  work  in  all  industries  either  to 
protest  against  the  actions  of  capitalist-employers,  or  to 
secure  certain  industrial  and  political  advantages  of  a  more 
or  less  moderate  nature,  or  to  achieve  the  revolutionary 
objective  of  destroying  present  industrial  and  political  in- 
stitutions and  establishing  in  their  stead  a  socialistic  order. 
Still  another  type  of  strike  is  the  "sympathetic  strike," 
which  is  the  cessation  of  work  by  wage-earners  in  one 
occupation  or  industry  having  no  grievance  with  their  own 


Industrial  Unrest  301 

employers,  in  order  to  aid  the  workers  on  strike  in  another 
industry. 

The  employers'  counter-weapon  for  the  strike  is  the  lock- 
out, which  may  be  defined  as  a  refusal  on  the  part  of  an 
employer,  or  a  group  of  employers,  to  allow  some  or  all 
of  the  employees  to  work  until  specific  demands  are  con- 
ceded and  complied  with.  The  strike  and  the  lockout  are 
similar  in  that  both  result  in  a  stoppage  of  work,  the  essen- 
tial difference  being  that  the  strike  is  declared  by  the 
employees,  while  the  lockout  is  put  into  operation  by  the 
employers. 

Labor  organizations  frequently  attempt  to  win  their 
struggle  by  resorting  to  the  practices  of  picketing  and  boy- 
cotting. Generally  speaking,  picketing  takes  place  when 
the  persons  who  are  out  on  strike  endeavor  to  persuade 
other  workmen  not  to  accept  employment  with  the  par- 
ticular employer  or  employers  involved  in  the  prevailing 
dispute.  Pickets  or  patrols  are  usually  stationed  about  the 
establishment  in  which  the  controversy  has  developed,  for 
the  purpose  of  persuading  the  "strike  breakers"  to  give 
up  employment  in  the  plant. 

As  used  in  industrial  relations,  the  term  boycott  applies 
to  the  action  of  a  combination  of  wage-earners  in  refusing 
to  continue  dealings  with  an  employer,  fellow  employee,  or 
other  persons,  and  in  attempting  to  persuade  or  coerce  third 
parties  to  refuse  patronage  and  dealings,  for  the  purpose  of 
compelling  the  party  against  whom  the  grievance  is  held  to 
acquiesce  in  certain  demands,  or  of  inflicting  punishment 
for  the  failure  to  agree  to  certain  demands  on  previous 
occasions.  "There  are  several  kinds  of  boycotts,  including 
(1)  the  primary  boycott,  which  is  a  simple  combination 
of  persons  for  the  suspension  of  all  dealings  with  another 
party  whose  policies  and  methods  are  unacceptable,  but 
involving  no  effort  to  persuade  or  coerce  third  parties;  (2) 
the  secondary  boycott,  which  is  unified  action  on  the  part 
of  workingmen  to  induce  or  persuade  a  third  party,  usually 
a  merchant  who  sells  the  commodities  produced  by  the 
employer  primarily  boycotted,  not  to  continue  business  rela- 
tions with  the  person  or  persons  against  whom  the  grievance 


80$  Industrial  Unrest 

is  initially  held;  (3)  the  compound  boycott,  which  takes 
place  when  workingmen  use  coercion  and  intimidation,  as 
distinguished  from  persuasion,  for  the  purpose  of  breaking 
off  business  relations  between  a  third  party  and  a  boycotted 
establishment,  such  action  resulting  in  threatened  or  actual 
financial  loss  or  physical  injury;  (4)  the  positive  boycott, 
or  application  of  the  ' '  fair  list ' '  or  union  label  to  products 
of  establishments  whose  labor  policies  are  endorsed  by  or- 
ganized labor,  for  the  purpose  of  confining  the  patronage 
of  union  labor  to  such  establishments;  (5)  the  negative 
boycott,  which  consists  in  publishing  in  the  official  organs 
of  union  labor  the  "unfair  list,"  or  names  of  firms  whose 
attitude  toward  and  dealings  with  organized  labor  are 
unacceptable,  the  purpose  being  to  divert  all  union 
patronage  from  these  firms.  Some  authorities  include  all 
boycotts  under  positive  and  negative;  others  list  only 
two  classes,  primary  and  secondary;  while  still  others 
discuss  the  several  varieties  just  defined  in  modified 
arrangements  according  to  their  importance.  At  best, 
therefore,  the  above  classification  is  an  arbitrary  one. 
Legally,  boycotts  are  usually  distinguished  as  primary  and 
secondary.  In  the  courts  it  is  the  secondary  boycott,  under- 
stood as  involving  (2)  and  (3)  of  the  foregoing  classifica- 
tion, that  is  important,  the  significant  factor  being  the  third 
party. 

As  the  lockout  is  the  employers'  counter-stroke  to  the 
strike,  so  the  blacklist  is  his  counter-weapon  to  the  boy- 
cott. The  blacklist  is  the  employers'  boycott;  it  is  his 
method  of  discriminating  against  employees  because  of 
former  alleged  offenses,  such  as  trade  union  membership, 
agitation,  or  strike.  Members  of  an  employers'  associa- 
tion may  distribute  a  list  of  workingmen  who  have  par- 
ticipated in  a  strike  or  have  been  suspected  of  trade  union 
activities,  or  for  some  other  reason  are  considered  trouble- 
makers. The  blacklist  takes  the  form  of  lists  kept  by 
employers'  associations  giving  information  with  regard  to 
workers,  on  the  basis  of  which  they  are  given  or  refused 
employment.  It  is  claimed  that  the  Metal  Trades  Associa- 


Industrial  Unrest  SOS 

tion,  an  avowed  antiunion  organization,  had  some  years 
ago  a  card  catalogue  of  60,000  names.1 

Frequently  employers  make  use  of  the  negative  black- 
list. Under  this  form  of  blacklist  members  of  an  em- 
ployers' association  maintain  files  which  contain  important 
information  about  employees  in  the  locality.  A  clearance 
card  is  given  discharged  employees,  and  facts  concerning 
them  are  placed  in  the  files  of  the  association.  Both  from 
these  facts  and  from  the  clearance  card  employers  can 
obtain  data  concerning  prospective  workmen.  In  these 
and  other  ways  wage-earners  who  are  suspected  of  being 
troublesome  and  affiliated  with  the  union  are  easily 
weeded  out.  This  method  not  only  furnishes  data  con- 
cerning ineligible  workmen  but  also  provides  information 
regarding  eligible  employees;  it  is,  therefore,  known  as 
"whitelisting"  and  corresponds  to  the  fair  list  and  the 
union  label  used  by  organized  labor.  It  is  evident  that 
the  blacklist  and  the  whitelist  are  simply  two  methods 
of  achieving  the  same  end ;  namely,  discrimination  against 
those  who  are  considered  by  a  group  of  employers  to  be 
undesirable. 

The  Development  and  Extent  of  Strikes  and  Lockouts 
in  the  United  States. — The  genesis  of  the  strike  as  a 
weapon  of  industrial  warfare  cannot  be  determined 
definitely.  "Strikes  are  as  old  as  the  wage  system  itself, 
and  the  slave  insurrections,  peasant  revolts  and  labor 
wars  which  frequently  occurred  before  the  emergence  of 
the  wage  system,  prove  the  existence  in  that  earlier  epoch 
of  all  the  elements  of  the  strike  save  those  which  arise 
from  that  system  itself."  a  There  are  evidences  of  striken 
In  Great  Britain  and  on  the  continent  during  the  four- 
teenth, fifteenth,  and  sixteenth  centuries.  The  earliest 
strikes  in  America,  of  which  we  have  any  record,  took 
place  in  the  middle  of  the  eighteenth  century,  probably 
about  1741,  when  the  journeymen  bakers  of  New  York 
City  demanded  an  advance  in  wages.  During  the  years 
1796,  1798,  and  1799  a  series  of  strikes  were  initiated  by 

1 R.  P.  Hoxie,  Trade  Unionism  in  thf  United  States,  p.  237. 
1  Adams  and  Sum  nor,  Labor  Problem*,  pp.  176,  177. 


304  Industrial  Unrest 

the  association  of  journeymen  shoemakers.  In  1803  a 
strike  occurred  among  the  sailors  of  New  York  City,  and 
in  1809  the  cordwainers  went  out  on  strike.  Labor  terms 
such  as  "scab,"  "strike,"  "general  turn-out,"  etc.,  were 
commonly  used  by  1809,  and  by  1835  strikes  had  become 
so  usual  that  it  was  said  "strikes  are  all  the  fashion." 
Not  until  1877,  however,  did  an  important  national  strike 
take  place.  In  that  year  railroad  strikes  became  so  general 
and  violent  that  transportation  and  business  were  seri- 
ously impaired,  and  state  and  national  troops  were  called 
out  to  quell  rioting  and  disturbance.  According  to  sta- 
tistics collected  by  the  United  States  Commissioner  of 
Labor,  there  were  1,440  strikes  and  lockouts  in  this  coun- 
try between  1741  and  1881. 

Statistics  of  strikes  and  lockouts  preceding  1881  are 
incomplete,  but  since  that  time  thorough  compilations 
have  been  made  by  federal  agencies.  In  the  period  of 
twenty-five  years  between  1881  and  1905  there  were 
36,757  strikes  and  1,546  lockouts  in  the  United  States, 
a  total  of  38,303,  exclusive  of  cessations  of  work  lasting 
less  than  one  day.  Almost  200,000  establishments  were 
involved,  the  number  of  strikers  being  approximately 
6,730,000  and  the  number  locked  out  716,000.  Including 
those  who  were  not  directly  involved  in  the  disputes  but 
who  were  unable  to  work  in  the  absence  of  those  who 
were,  the  total  number  of  persons  affected  was  approxi- 
mately 9,530,000,  of  whom  91  per  cent  were  idle  because 
of  strikes  and  9  per  cent  on  account  of  lockouts.  Because 
of  the  Pullman  strike  more  persons  (660,425)  were  thrown 
out  of  work  in  1894  than  in  any  other  year  of  the  period, 
although  in  1902,  the  year  of  the  famous  anthracite  coal 
strike,  approximately  660,000  persons  were  out  of  work. 
The  greatest  number  of  strikes  occurred  in  1903  when 
the  number  was  3,494,  involving  more  than  20,000  es- 
tablishments and  about  532,000  strikers. 

The  period  of  the  World  War  was  noted  in  practically 
every  country  for  the  extraordinary  increase  in  strikes. 
The  experience  of  the  United  States  is  indicated  in  the 
following  statistics: 


Industrial  Unrest  305 

Number  of  Number  of 

Year  Strikes  Lockouts  Total 

1916  3,681  108  3,789 

1917  4,324  126  4,450 

1918  3,248  105  3,353 

1919  3,444  125  3,569 

1920  3,109  58  3,167 

1921  2,164  103  J5,267 
Totals  19,970  625  20,595 

Reports  received  for  about  11,500  strikes  and  321  lock- 
outs showed  that  the  number  of  persons  involved  was 
approximately  9,450,000  and  295,000,  respectively,  so  that 
in  all  probability  not  less  than  15,000,000  persons  were 
involved  directly  and  5,000,000  indirectly  in  the  total  num- 
ber of  strikes  occurring  in  the  entire  period,  and  not  less 
than  a  total  of  750,000  in  the  lockouts. 

The  duration  of  strikes  and  lockouts  varies  from  year 
to  year.  In  the  approximately  37,000  strikes  and  1,546 
lockouts  that  occurred  in  the  United  States  between  1881 
and  1905,  the  average  duration  of  strikes  per  establish- 
ment was  about  25  days  and  of  lockouts  about  85  days. 
Information  for  more  than  10,000  strikes  and  about  300 
lockouts  in  the  period  1916-1920  indicates  that  the  average 
duration  of  strikes  was  26  days  and  of  lockouts  50  days. 
It  appears,  therefore,  that  lockouts  are  much  less  numer- 
ous but  more  stubborn  than  strikes,  the  duration  of  the 
former  being  two  to  four  times  as  long  as  the  latter.  This 
is  undoubtedly  accounted  for  by  the  greater  ability  of 
the  employer  to  hold  out.  Exhaustion  of  strike  funds 
generally  forces  workers  to  seek  a  settlement  of  the 
dispute  and, to  terminate  the  strike.  Fully  80  per  cent 
of  all  strikes  are  called  by  labor  organizations,  and  about 
85  per  cent  occur  among  male  employees,  the  remainder 
being  among  female  employees  alone  or  involving  both  men 
and  women.  The  greater  proportion  of  men  involved  in  dis- 
putes is  accounted  for  by  (1)  the  larger  proportion  of 
male  workers  in  industry,  (2)  the  lack  of  effective  or- 
ganization among  women,  and  (3)  the  greater  tractability 
of  women  employees,  who  do  not  protest  so  readily  as 
men  against  undesirable  working  conditions. 


306  Industrial  Unrest 

There  is  a  definite  connection  between  labor  organi- 
zation and  the  success  of  strikes.  Trade  unions  appear 
to  be  successful  in  about  50  per  cent  of  the  strikes  they 
initiate  and  partially  successful  in  about  15  per  cent.  In 
periods  of  industrial  prosperity  the  workers  are  more  suc- 
cessful than  employers,  while  in  periods  of  business  de- 
pression the  employers  are  more  successful.  In  the  pros- 
perous year  of  1917,  for  example,  employees  won  twice 
as  many  strikes  as  employers;  while  in  1921,  when  busi- 
ness depression  was  setting  in,  the  ratio  was  practically 
reversed.  This  is  not  difficult  to  explain.  In  periods  of 
industrial  activity  employers  are  anxious  to  keep  up  pro- 
duction in  order  to  secure  as  large  as  possible  a  share  of 
profits;  consequently,  they  are  willing  to  adjust  griev- 
ances without  resort  to  a  cessation  of  work.  In  years 
of  industrial  depression  production  is  curtailed,  men  are 
seeking  jobs,  and  employers  are  not  afraid  to  risk  a  strike. 
Strikes  called  in  the  absence  of  effective  organization 
almost  invariably  fail.  The  occupations  in  which  strikes 
occur  most  frequently  are  the  building  trades,  mining, 
metal  trades,  transportation,  the  clothing  trades,  and  the 
textile  industry.  More  than  50  per  cent  of  the  strikes 
and  lockouts  occur  in  the  leading  industrial  states  of 
New  York,  Pennsylvania,  Illinois,  Massachusetts,  and  Ohio. 

The  Economic  Waste  of  Strikes  and  Lockouts. — Wage- 
earners  as  a  class  probably  gain  more  than  they  lose  as 
a  result  of  strikes  that  end  in  their  favor,  and  employers 
as  a  class  doubtless  gain  more  than  they  lose  as  a  result 
of  lockouts  which  they  win.  Whatever  advantages  may 
accrue  to  employers  and  employees  from  methods  of  in- 
dustrial warfare,  the  public,  which  is  not  directly  involved 
in  the  dispute,  receives  no  such  benefits.  Experience  has 
shown  that  while  the  losses  resulting  from  strikes  and 
lockouts  are  very  large,  it  is  impossible,  except  in  a  few 
isolated  cases,  to  measure  these  wastes.  Employers'  asso- 
ciations often  make  extravagant  estimates  of  the  losses 
incurred,  but  these  are  discounted  by  impartial  investi- 
gators. "Even  an  exact  statement  of  the  time  lost 
through  strikes,  and  the  amount  of  money  losses  in  wages, 


Industrial  Unrest  307 

interest,  and  profits  due  to  stoppage  of  work,  were 
such  a  statement  possible,  would  give  a  very  inadequate 
idea  of  the  real  cost  to  the  worker,  the  employer,  and  the 
community  in  general,  and  the  elaborate  calculations  of 
costs  of  strikes  which  make  their  appearance  from  time 
to  time,  generally  under  the  title  of  estimates,  are  but 
mere  guesses  by  the  compiler,  not  statistical  in  character, 
and  frequently  incorrect  in  their  conclusions. ' ' 3 

Although  the  total  cost  of  industrial  strife  cannot  be 
measured,  a  few  estimates  suggests  how  great  must  be 
the  actual  cost.  In  the  United  Kingdom  during  the 
period  of  seventeen  years  between  1905  and  1921,  inclusive, 
there  were  14,222  industrial  disputes  involving  14,243,000 
workers  and  lasting  in  the  aggregate  approximately 
169,500,000  working-days.  Of  the  86,000,000  working- 
days  lost  on  account  of  disputes  in  1921,  70,000,000  were 
lost  in  the  coal  strike  of  that  year  which  involved 
1,100,000  persons.  The  loss  in  wages  during  the  entire 
.period  (1905-1921)  was  probably  not  less  than  $325,000,- 
000,  while  the  loss  in  production,  depreciation  in  capital, 
and  inconvenience  to  industries  and  individuals  not  in- 
volved directly  in  the  controversies  cannot  be  estimated 
even  approximately. 

Turning  to  the  United  States,  the  loss  to  em- 
ployees on  account  of  strikes  that  occurred  between 
1881  and  1900,  inclusive,  was  estimated  at  $257,863,478, 
while  the  loss  to  the  workers  because  of  lockouts  in  the 
same  period  was  $48,819,745,  a  total  of  $306,683,223.  The 
average  loss  incurred  by  each  of  the  more  than  6,000,000 
persons  on  strike  in  the  more  than  117,000  establishments 
was  $42,  while  504,307  workers  who  were  locked  out  lost  an 
average  of  $97.  Employers  lost  an  average  of  $4,915  per 
establishment  on  account  of  lockouts.  Financial  assis- 
tance furnished  by  labor  organizations  to  those  out  on 
strike  was  estimated  at  $16,174,793,  and  to  those  locked 
out  $3,451,461,  a  total  of  $19,626,254.  These  estimates 
are  probably  low,  and  do  not  include  amounts  furnished 
by  outside  sympathizers.  During  the  twenty  years  cm- 

•  Monthly  Labor  Ecviev,  September,  1020,  p.  189. 


308  Industrial  Unrest 

ployers  incurred  a  loss  of  $122,731,121  from  the  strikes, 
and  $19,927,983  from  lockouts,  a  total  of  $142,659,104,  or 
an  average  loss  of  $1,119  for  each  establishment  involved. 
It  is  further  estimated  that  the  employees  in  the  anthra- 
cite coal  strike  of  1902  lost  $25,000,000  in  wages  and 
$1,800,000  in  relief  funds,  while  the  receipts  of  coal  com- 
panies decreased  $46,100,000,  and  a  loss  of  $28,000,000 
was  incurred  by  transportation  companies. 

According  to  data  collected  by  officials  of  several  depart- 
ments of  the  federal  government  in  1921,  wage-earners 
throughout  the  United  States  are  incurring  losses  at  the 
rate  of  $4,000,000,000  a  year  as  a  result  of  strikes,  lock- 
outs, and  deliberate  absenteeism  from  their  tasks.  In  the 
strike  of  the  New  York  garment  workers  alone  the  loss 
to  workers  and  employers  was  estimated  at  from  $750,000 
to  $1,000,000  a  day.  Industrial  disputes  in  Pennsylvania 
during  the  four  years  1916-1919  caused  a  loss  of  10,793,243 
work-days  and  $28,034,871  in  wages.  The  more  than  20,- 
000  strikes  and  lockouts  that  occurred  in  the  United  States 
between  1916  and  1921,  inclusive,  certainly  cost  employers 
and  employees  an  enormous  sum. 

In  interpreting  wage  losses  in  strikes  it  must  be  re- 
membered that  a  large  number  of  strikers  who  find  work 
elsewhere  earn  considerable  money  pending  settlement 
of  the  disputes,  and  that  in  case  of  victorious  strikes  the 
workers  usually  receive  increased  wages  which  compen- 
sate for  losses  incurred  by  the  walkout.  Moreover,  it 
has  been  found  that  most  strikes  occur  in  irregular  or  sea- 
sonal industries  and  that  time  and  production  losses 
caused  by  disputes  are  made  up  by  increased  production 
at  other  periods  of  the  year.  Time  lost  on  account  of 
strikes  and  lockouts  is  insignificant  compared  with  that 
resulting  from  other  causes.  Official  estimates  for  the 
United  States  show  that  illness,  injury  from  accidents, 
and  "personal  reasons"  cause  the  average  industrial 
worker  a  loss  of  twenty  days  a  year,  or  a  total  of  260,000,- 
000  work-days  for  the  13,000,000  workers  in  industrial 
pursuits.  The  financial  loss  to  workers  for  causes  other 
than  strikes  is  between  $1,300,000,000  and  $2,000,000,000, 


Industrial  Unrest  309 

approximating  the  amount  lost  because  of  strikes  and 
lockouts.  During  1920  and  1921,  however,  unemploy- 
ment cost  the  workers  of  this  country  $10,000,000,000, 
according  to  estimates  made  for  the  National  Conference 
on  Unemployment.  In  New  York  State  in  1916  the  per 
capita  loss  on  account  of  strikes  was  two  days,  which 
was  only  one-fifth  as  serious  as  the  average  time  lost 
through  illness.  The  economic  loss  incurred  by  wage- 
earners  because  of  strikes,  therefore,  is  much  less  than 
in  popularly  supposed. 

Causes  of  Industrial  Unrest, — The  causes  of  industrial 
unrest  may  be  classified  as  psychological,  moral,  political, 
social,  and  economic.  Some  of  these  causes  are  temporary, 
Vanishing  with  improvement  in  industrial  conditions  and 
labor  policies;  others  are  more  or  less  permanent,  ap- 
parently deep-rooted  in  the  foundations  of  the  economic 
system. 

1.  The  psychological  causes  of  industrial  unrest  develop 
from  the  mental  reactions  of  the  workers.  Industrial  em- 
ployment with  its  minute  subdivision  of  labor,  long 
hours,  rigid  discipline,  and  suppression  of  native  ability 
fails  to  elicit  cheerful  cooperation  and  often  incites  re- 
bellion within  the  individual.  The  reason  for  labor  in- 
efficiency is  often  found  in  the  fact  that  there  is  little 
room  for  choice  in  the  niche  that  men  and  women  must 
fill  in  industry.  Work  becomes  drudgery  for  the  great 
mass  of  industrial  workers  whose  native  impulses  and  as- 
pirations are  stifled  by  the  oppressive  monotony  of  ma- 
chinery. Men  become  mere  automatons,  just  cogs  in  tho 
complex  mechanism  of  industry.  The  fullest  expression 
of  individuality  is  hardly  possible  under  such  circum- 
stances, and  mass  protest  is  the  logical  result.  Differences 
in  economic  status  resulting  either  from  inequalities  in 
capacity,  or  from  "pull"  rather  than  inherent  natural 
ability,  place  some  men  in  lucrative  positions  and  others 
in  less  profitable  ones.  The  separation  of  interests  result- 
ing from  the  division  of  industrial  classes  into  employers 
and  employees  has  caused  antagonism.  Dormant  passions 
of  jealousy,  onvy^  suspicion,  aud  hatred  are  forced  into 


310  Industrial  Unrest 

expression,  and  the  result  is  repetitious  strikes,  labor  turn- 
over, and  limitation  of  output. 

Another  important  factor  which  affects  the  industrial 
struggle  is  the  widespread  and  deepening  conviction  that 
wealth,  which  is  produced  largely  through  the  efforts  of 
the  wage-earners,  is  distributed  so  unevenly  as  to  con- 
stitute a  gross  injustice.  The  workers  wonder  why  there 
is  no  equitable  relation  between  hard,  honest  toil  and 
adequate  reward ;  why  there  is  no  security  of  employment, 
and  their  families  must  suffer  because  of  the  varying 
fortunes  of  industry ;  why  the  unskilled  workers,  who  are 
so  indispensable  to  modern  production,  are  so  negligible 
a  factor  socially ;  why  it  is  that  he  who  serves  least  or  not 
at  all  may  reap  the  richest  harvest  in  the  distribution  of 
the  product  of  industry.  Thus  besieged  with  wonderings, 
the  workers'  minds  are  receptive  to  the  plausible  logic  of 
the  soap-box  orator  who  gives  them  promise  of  a  wage- 
earners'  millennium  in  which  there  will  be  no  master-cap- 
italist class. 

2.  The  moral  conditions  that  conduce  to  industrial  unrest 
are  found  in  the  uncertainty  and  abuse  of  contractual 
relations.    As  credit  is  the  foundation  of  modern  industry, 
business,  and  commerce,  so  mutual  trust  and  confidence 
are  fundamental   to   successful  and  peaceful  industrial 
relations.    Motivated  by  self-interest,  fear,  and  suspicion, 
each  of  the  parties  to  industrial  agreements  is  prone  to 
disregard  the  interests  and  welfare  of  the  other  and  to 
interpret  contractual  relations  in  terms  of  only  one  group 
interest.     Contracts   and  agreements  are  disregarded   or 
broken,  with  no  thought  of  the  unmoral  character  of  such 
actions.     Subversion  of  moral  standards  in  contractual 
relations  breeds  suspicion  and  antagonism,  and  unrest 
will  continue  so  long  as  ethics  have  no  place  in  industry. 

3.  The  social  causes  of  unrest  are  found  in  what  may  be 
called  the  social  environment  of  industry.    Our  industries 
are  stuffed  into  congested  cities  and  the  congestion  of 
population  increases  with  the  addition  of  each  new  plant. 
The  worker  cannot  afford  to  live  a  long  distance  from 
his  labor,  desirable  though  it  may  be,     Consequently, 


Industrial  Unrest  311 

wage-earners  must  live  in  unattractive  homes  in  the  midst 
of  an  even  less  attractive  neighborhood.  Opportunities 
for  proper  social  activities  and  recreational  life  do  not 
exist,  and  the  degenerating  social  environment  is  added 
to  the  drudgery  of  toil  to  produce  a  restlessness  that  finds 
its  expression  in  industrial  grievances  and  strikes.  Only 
in  recent  years  have  employers  recognized  the  potency 
of  these  social  factors  in  industrial  unrest. 

4.  It  is  not  easy  to  detect  the  political  causes  of  indus- 
trial unrest,  but  the  relationship  is  unmistakable.    There 
is  an  increasing  feeling  among  wage-workers  that  political 
power  should  be  exerted  more  directly  in  the  interests  of 
the  workers,  who  form  the  majority  of  the  nation,  and  that 
representation  and  influence  in  governmental  activities 
should  be  proportionate  to  numbers  and  not  to  wealth  or 
prestige    or    any    other    less    important    consideration. 
Workers  do  not  have  a  degree  of  control  over  legislation 
proportionate  to  their  numerical  strength,  and  even  in  the 
courts  the  bias  of  judges  in  favor  of  property  rights  and 
employers  results  in  extreme  injustice  to  the  working  class. 
Property  rights  are  protected  and  human  rights,  guar- 
anteed under  the  constitution,  are  subverted. 

5.  Important  as  are  all  the  foregoing  causes  of  unrest, 
economic  conditions  are  most  fundamental  in  producing 
the  industrial  conflict.    The  specific  causes  of  unrest  are 
grouped  around  the  questions  of  wages,  length  of  the  work- 
ing-day, conditions  of  employment,  and  security  of  employ- 
ment.   The  workers  contend  that  every  trade  and  occu- 
pation should  guarantee  a  minimum  wage  sufficient  to 
provide  a  standard  of  decency  and  comfort,  and  that  the 
wage  scale  should  bear  an  agreed  relation  to  the  profits 
of  industry.    Industrial  disputes  often  arise  from  a  desire 
for  fewer  hours  of  labor,  improved  physical  conditions 
of  employment,  a  share  in  the  management  of  industry, 
and   relief   from   the   recurring   evil   of   unemployment. 
Employers,  on  the  other  hand,  protest  against  the  in- 
efficiency of  labor,  the  persistent  attempt  to  shorten  the 
working-day  to  unreasonable  limits,  the  constant  inter- 
ference of  business  agents  of  the  union,  disregard  of  the 


312  Industrial  Unrest 

rights  of  nonunion  men,  and  the  increasing  tendency  to 
limit  freedom  in  the  control  of  industry. 

Disputes  concerning  wages  or  wages  and  hours  are 
responsible  for  50  to  70  per  cent  of  strikes  in  most  years, 
although  the  responsible  factors  vary  considerably  from 
year  to  year.  Of  the  17,806  strikes  that  occurred  be- 
tween 1916  and  1920,  for  example,  about  10,000,  or  55  per 
cent,  were  caused  totally  or  partially  by  disputes  over 
wages.  Recognition  of  the  union,  or  recognition  of  the 
union  combined  with  the  question  of  wages  and  the  em- 
ployment of  nonunion  workers,  is  the  second  most  im- 
portant cause  of  strikes.  Recognition,  hours,  and  wages 
are  often  coupled  in  the  demands  of  labor.  Discrimina- 
tion against  union  workers,  unfair  treatment  by 
foremen,  discharge  of  fellow  workers,  undesirable  con- 
ditions of  labor,  and  nonpayment  of  wages  are  promi- 
nent causes  of  disputes.  The  most  important  cause  of 
lockouts  is  the  refusal  of  employers  or  employers'  asso- 
ciations to  recognize  the  union  and  establish  the  union 
shop.  Direct  negotiation  between  employers  and  em- 
ployees, through  the  medium  of  representatives  of  both 
sides,  is  the  exception  and  not  the  rule  in  American  in- 
dustry; this  fact  constitutes  a  central  cause  of  friction 
in  industrial  relations. 

The  Legal  Status  of  Unions  and  Union  Methods. — In 
examining  the  legal  status  of  labor  organizations,  strikes, 
boycotts,  picketing,  unfair  list,  and  other  methods  of 
enforcing  collective  action,  one  is  impressed  with  the 
conflict  of  judicial  interpretation  and  decision  in  the 
United  States  as  compared  with  the  definiteness  and  uni- 
formity of  the  law  in  such  countries  as  Great  Britain. 

1.  The  Development  of  English  Law  in  Relation  to  In- 
dustrial Disputes. — Medieval  regulations  restricted  free 
competition  in  the  labor  market,  and  the  Combination 
Acts,  which  were  passed  between  the  sixteenth  and  the 
eighteenth  centuries,  made  illegal  collective  action  for 
the  purpose  of  raising  wages,  reducing  the  number 
of  hours  of  work,  or  changing  the  conditions  of  labor. 
For  this  reason  trade  unionists  were  prosecuted  as 


Industrial  Unrest  313 

revolutionists  during  the  first  twenty  years  of  the 
nineteenth  century,  but  the  policy  of  suppression  stimu- 
lated violence  and  sedition,  and  the  Combination  Acts 
were  repealed  in  1824.  The  act  of  1825  recognized  and 
established  the  right  of  collective  bargaining,  thereby 
sanctioning  the  right  of  workers  to  withhold  their  labor 
from  the  market  by  concerted  action.  This  was  a  definite 
step  in  the  emancipation  of  the  workers.  The  courts  con- 
tinued to  look  upon  labor  organizations  as  institutions 
functioning  in  restraint  of  trade,  and  not  entitled  to  legal 
protection.  By  the  act  of  1871  (amended  1876),  however, 
no  trade  union  was  henceforth  to  be  judged  illegal  merely 
because  it  was  in  restraint  of  trade,  unions  were  entitled 
to  registration  under  the  law,  and  protection  was  given 
their  funds.  Trade  unions  thus  enjoyed  the  freedom  of  a 
corporation  without  assuming  its  legal  responsibilities. 

Under  the  Conspiracy  and  Protection  of  Property  Act 
of  1875,  the  status  of  trade  unions  was  further  strength- 
ened by  a  clause  repealing  the  old  law  of  conspiracy  in 
trade  disputes  between  employers  and  employees.  The 
legalization  of  trade-union  methods  was  now  accomplished 
and  peaceful  picketing  was  definitely  permitted.  No  act 
committed  by  a  group  of  workmen  was  henceforth  to  be 
punishable  unless  the  same  act,  when  done  by  an  indi- 
vidual, constituted  a  criminal  offense.  Trade  unions  were 
thus  given  a  peculiar  legal  position.  They  could  not  be 
treated  as  criminal  organizations ;  their  members  and  offi- 
cers could  not  be  punished  in  the  performance  of  their 
duties;  and  they  were  under  no  limitations  in  so  far  as 
criminal  Taw  was  concerned.  It  was  supposed,  moreover, 
that  trade  unions  were  protected  by  law  in  all  their  civil 
functions  and  enjoyed  freedom  from  damages  resulting 
from  strikes  and  boycotts. 

In  1901,  after  thirty  years  of  unquestioned  immunity, 
the  judges  in  the  Tail'  Vale  case  decided  that  a  trade 
union  could  be  made  answerable  in  damages  for  all  acts 
of  its  officials  as  if  it  were  a  corporate  body.  For  its 
activities  in  connection  with  the  strike  on  the  Taff  Vale 
Railway  in  South  Wales,  the  Amalgamated  Society  of 


314  Industrial  Unrest 

Railway  Servants  was  compelled  to  pay  £23,000  in 
damages.  The  judgment  was  sustained  by  the  House  of 
Lords  which  is  the  highest  court  of  Appeal  in  Great 
Britain.  Protection  from  civil  prosecution  was  imme- 
diately sought  by  the  trade  unionists  and  in  1906  the 
Trade  Disputes  Act  was  passed,  which  remains  the  charter 
of  trade  unionism  in  Great  Britain.  Under  the  terms 
of  this  act  no  civil  action  can  be  entertained  against  a 
trade  union  on  account  of  any  wrongful  act  committed 
by  or  on  behalf  of  the  union.  Although  the  act  does  not 
abrogate  the  law  of  civil  conspiracy,  it  gives  exceptional 
protection  to  trade-union  officials  by  providing  that,  when 
committed  in  connection  with  a  trade  dispute:  "(1)  An 
act  done  in  concert  shall  not  be  actionable  if  it  would  not 
have  been  actionable  if  done  without  concert;  (2)  attend- 
ance solely  in  order  to  inform  or  persuade  peacefully  shall 
be  lawful;  (3)  an  act  shall  not  be  actionable  merely  by 
reason  of  its  inducing  another  person  to  break  a  contract 
of  employment,  or  of  its  being  an  interference  with  an- 
other person's  business,  or  with  his  right  to  dispose  of  his 
capital  or  his  labor  as  he  chooses."4 

By  the  Trade  Union  Act  of  1913  labor  organizations  are 
given  power  to  include  in  their  constitutions  any  lawful 
purpose  so  long  as  its  principal  objects  are  those  of  a 
trade  union  as  defined  in  the  act  of  1876,  and  to  spend 
money  for  any  purpose  thus  sanctioned.  This  law  strength- 
ens the  political  functions  of  unionism  in  the  British 
Isles,  since  union  funds  can  now  be  spent  legally  in  se- 
curing the  election  of  labor  members  to  Parliament,  and 
other  bodies. 

2.  The  Law  in  the  United  States. — Labor  law  and  ju- 
dicial opinion  in  the  United  States  are  still  vague  and 
conflicting.  The  rights  of  organized  labor  differ  greatly 
between  the  various  states,  and  even  in  the  same  state  a 
perplexing  conflict  of  judicial  opinion  is  often  found.  The 
result  is  that  the  terms  strike,  boycott,  and  picketing  are  not 


4  Sidney  and  Beatrice  Webb,  History  of  Trade  Unionism,  1920  ed., 
p.  607. 


Industrial  Unrest  315 

standardized,  and  a  puzzling  uncertainty  surrounds  collec- 
tive action  on  the  part  of  the  workers. 

(a)  Strikes. — The  legality  of  labor  organizations  is  no 
longer  questioned  in  the  United  States,  but  the  methods 
which  they  may  employ  in  making  their  collective  action 
effective  are  seriously  limited.  A  decision  handed  down 
by  the  United  States  Supreme  Court  in  1921,  in  the  case 
of  the  American  Steel  Foundries  Company  v.  Tri-City 
Trades  Council,  involving  union  activities  in  a  strike  at 
Granite  City,  Illinois,  stated  that  labor  organizations 
have  a  clear  legal  right  to  undertake  the  unionization  of 
workers  in  nonunion  plants,  even  where  they  have  no 
members,  so  long  as  they  keep  within  the  limits  of  lawful 
propaganda  and  other  lawful  means.  This  extension  of 
the  right  to  organize  was  a  signal  victory  for  the  unions, 
but  the  same  decision  imposed  serious  limitations  on  cer- 
tain other  union  activities. 

Interpreted  as  merely  the  act  of  quitting  work  collec- 
tively, the  strike  is  recognized  as  legal,  but  strikes  gen- 
erally imply  concerted  action  to  enforce  certain  demands, 
thus  introducing  the  element  of  combination  and  threat 
which  the  courts  usually  do  not  sanction.  Strikes  for  the 
primary  purpose  of  injuring  the  employer  or  nonunion 
workmen  are  generally  considered  illegal,  practically  all 
strikes  being  condemned  whenever  the  element  of  intimi- 
dation or  coercion  is  manifested.  Although  the  law  of 
strikes  in  the  United  States  is  characterized  by  a  maze 
of  conflicting  decision,  some  general  tendencies  have  ap- 
peared in  judicial  opinion  in  recent  years.  Except  where 
such  action  is  prohibited  by  statute,  as  under  the  Kansas 
Industrial  Court  Act  of  1920,  strikes  for  the  purpose  of 
increasing  wages  and  decreasing  hours  are  considered 
legal,  while  strikes  to  gain  a  closed  shop,  sympathetic 
strikes,  and  strikes  against  the  use  of  nonunion  material 
are  generally  illegal,  except  in  California  where  all 
strikes  are  legal.  Whereas,  in  the  early  years  of  the 
nineteenth  century  no  man  was  at  liberty  to  "combine, 
conspire,  confederate,  and  unlawfully  to  agree  to  regulate 
the  whole  body  of  workmen,"  and  combinations  of  work- 


316  Industrial  Unrest 

men,  whether  designed  to  benefit  the  workers  or  to  injure 
the  employers,  were  illegal,  the  general  view  to-day  is 
that  "whatever  one  man  may  do  alone,  he  may  do  in 
combination  with  others,  provided  they  have  no  unlawful 
object  in  view." 

Motive  becomes  the  central  factor  in  determining  the 
legality  of  strikes.  If  the  dominant  motive  is  to  benefit 
the  workers,  that  is,  if  labor  organizations  strike  for 
higher  wages,  shorter  hours,  and  improved  conditions  of 
employment  and  employment  relations,  their  action  is  con- 
sidered legal.  "A  peaceable  and  orderly  strike,  not  to 
harm  others,  but  to  improve  their  own  conditions,  is  not 
&  violation  of  law."  On  the  other  hand,  strikes  are  not 
legal  if  the  object  is  to  gratify  the  motive  to  inflict  injury 
on  others,  or  if  they  are  accompanied  by  violence  and  co- 
ercion. Not  motive  but  conduct  becomes  the  criterion  of 
legality  in  the  courts  of  California.  "In  case  of  a  peace- 
able and  ordinary  strike,  without  breach  of  contract  and 
conducted  without  violence,  threats,  or  intimidation,  this 
court  would  not  inquire  into  the  motives  of  the  strikers. 
Their  acts  being  entirely  lawful,  their  motives  would  be 
held  immaterial. ' '  The  determination  of  motive  is  extremely 
difficult,  and  the  prejudice  of  the  judge  is  likely  to  be  the 
ultimate  basis  of  the  decision. 

Strikes  of  policemen  and  firemen  or  any  strikes  against 
the  government,  and  strikes  involving  the  obstruction  of  the 
mails,  interference  with  transportation  facilities  between 
states,  or  restraint  of  interstate  commerce  are  in  great 
disfavor  and  likely  to  be,  per  se,  illegal.  Strikes  of  public 
employees  were  condemned  almost  unanimously  in  the 
United  States  when,  in  the  summer  of  1919,  police  and  fire 
departments  in  several  American  cities  organized  and 
struck.  In  the  United  States,  England,  and  Canada  there 
is  legal  prohibition  against  public  employees  joining  labor 
unions.  Under  the  Sherman  Anti-Trust  Act  of  1890  the 
strike  action  of  organized  labor  is  often  considered  a 
conspiracy  restraining  interstate  commerce. 

(b)  Boycotts. — Although  a  great  deal  of  conflicting 
opinion  obtains,  there  is  more  agreement  concerning  the 


Industrial  Unrest  317 

legal  status  of  boycotts  than  of  strikes.  In  both  eases  the 
motive  is  frequently  the  deciding  factor.  Boycotts  organ- 
ized with  intent  to  injure  are  held  illegal.  In  the  United 
States  courts  have  usually  condemned  boycotting  as  il- 
legal on  the  ground  that  all  boycotts  imply  an  effort  to 
4 'coerce"  third  parties,  and  are,  therefore,  conspiracies 
limiting  or  obstructing  the  exercise  of  constitutional 
rights  which  protect  life,  liberty,  and  property.  The 
primary  boycott  is  sometimes  distinguished  from  the  sec- 
ondary boycott,  the  latter  involving  boycott  of  a  third 
party,  usually  a  merchant  who  sells  the  product  of  the 
employer  primarily  boycotted.  It  had  been  decided  prior 
to  the  Clayton  Act  that  the  use  of  secondary  boycotts 
and  the  publishing  of  lists  of  unfair  dealers  were  within 
the  prohibitions  of  the  Sherman  Act,  without  reference  to 
the  matter  of  peaceful  persuasion  or  threats  of  force. 
The  primary  boycott,  if  peaceful,  was  viewed  as  legal  in 
many  jurisdictions.  The  distinction  is  immaterial  in  prac- 
tice, since  it  is  difficult  to  conceive  of  a  successful  boy- 
cott not  involving  a  third  party. 

The  Danbury  Hatters'  case  in  1908  gave  a  serious  blow 
to  the  employment  of  the  boycott  by  American  trade 
unions.8  In  this  case  the  Hatters'  Association  had  inter- 
fered with  interstate  commerce  in  the  products  of  the 
Loewe  Company,  by  boycotts  carried  on  throughout  the 
country  at  the  points  of  retail  distribution.  For  this 
action  the  association  was  subjected  to  a  penalty  three 
times  the  amount  of  damages  found  to  be  incurred, 
aggregating  nearly  $300,000,  levied  against  175  members 
of  the  hatters'  union.  The  decision  resulted  in  the  dis- 
continuance by  the  American  Federation  of  Labor  of  its 
"We  Don't  Patronize"  list  and  greatly  diminished  the 
use  of  the  boycott. 

The  Clayton  Act,  approved  October  15,  1914,  amended 
the  anti-trust  act  of  July  2,  1890,  popularly  known  as 
the  Sherman  Act.  An  important  change  made  by  this  act 
(section  16)  gives  to  private  parties  a  right  to  relief  by 
injunction  in  any  court  of  the  United  States  against 

•S«e  Loewe  v.  L&wlor,  208  U.  8.  274,  28  Sup.  Ot.  801  (1908). 


318  Industrial  Unrest 

threatened  loss  or  damage  by  a  violation  of  the  anti-trust 
laws.  Picketing,  boycotting,  strike  benefits  and  advising 
of  others  to  cease  to  patronize  are  lawful  if  carried  on  by 
peaceful  and  lawful  means.  On  January  3,  1921,  the 
Supreme  Court  of  the  United  States  rendered  an  im- 
portant decision,  three  justices  dissenting,  which  construed 
the  Clayton  Act  in  the  case  of  the  Duplex  Printing  Press 
Company  of  Battle  Creek,  Michigan,  v .  E.  T.  Deering  et  al. 
(41  Sup.  Ct.  172).  The  Duplex  Company  refused  to  rec- 
ognize the  union  and  employed  both  union  and  nonunion 
men,  working  long  hours  and  not  having  the  union  scale 
of  wages.  Two  other  companies  which  had  accepted  the 
demands  of  the  International  Association  of  Machinists 
notified  the  latter  that  they  would  be  obliged  to  termi- 
nate their  union  agreements  unless  the  Duplex  Company 
would  accept  the  same  terms,  thus  equalizing  competitive 
conditions.  The  Machinists'  Association  called  a  strike 
at  the  Duplex  factory  which  was  ineffective,  and  then  pro- 
ceeded to  boycott  the  products  of  the  company  in  New 
York  City  and  vicinity,  which  is  an  important  market 
for  presses  manufactured  by  that  company.  This  action 
involved  third  parties,  and  the  legality  of  the  secondary 
boycott  under  the  Clayton  law  was  challenged. 

Sections  6  and  20  of  the  Clayton  Act  were  the  provisions 
in  question  when  the  case  reached  the  United  States 
Supreme  Court.  The  former  section  declares  that  the 
existence  and  operation  of  labor  unions  shall  not  be  re- 
garded as  a  violation  of  the  Sherman  Anti-Trust  law,  and 
the  latter  section  states  that  in  suits  between  employers  and 
employees,  growing  out  of  or  involving  a  dispute  con- 
cerning conditions  of  employment,  no  injunction  shall 
be  issued  to  prevent  people  from  inducing  others  to  go 
out  on  strike,  from  paying  strike  benefits,  from  peaceful 
picketing  and  peaceful  boycotting,  and  that  none  of  such 
acts  shall  be  held  to  constitute  a  violation  of  any  law 
of  the  United  States.  Concerning  section  6,  the  majority 
of  the  court  (six  out  of  nine)  held  that  the  provision 
assumes  the  normal  objects  of  labor  unions  to  be  lawful 
and  merely  declares  that  they  are  lawful,  but  does  not 


Industrial  Unrest  319 

relieve  such  organizations  from  liability  where  they  go 
outside  their  normal  activities  and  commit  acts  which 
violate  any  statutes  of  the  United  States.  With  regard  to 
the  provisions  of  section  20,  the  prevailing  opinion  inter- 
preted them  as  applying  to  employers  and  employees 
involved  in  the  controversy  and  not  covering  acts  done 
by  third  parties  not  occupying  a  proximate  relation  to 
the  controversy,  and  held  further  that  these  provisions  did 
not  authorize  people  to  instigate  sympathetic  strikes,  picket- 
ing, and  boycotting  against  employers  wholly  unconnected 
with  the  establishment  primarily  boycotted.  The  second- 
ary boycott,  therefore,  remains  as  it  stood  prior  to  the 
Clayton  Act — illegal.  A  more  liberal  view  is  developing 
in  some  jurisdictions.  In  California  and  Oklahoma  boy- 
cotts have  been  held  legal,  some  courts  in  New  York  have 
sustained  the  boycott,  and  in  Missouri  and  Montana  the 
printing  and  the  distribution  of  circulars  for  purposes  of 
boycott  may  not  be  directly  enjoined  by  the  courts. 

(c)  Picketing. — The  effectiveness  of  strikes  depends 
upon  the  success  of  the  strikers  in  preventing  the  em- 
ployer from  securing  new  employees  to  take  their  places 
in  the  plant.  Peaceful  picketing  was  legalized  in  Great 
Britain  by  the  Trades  Dispute  Act  of  1906,  and  is  gen- 
erally considered  legal  in  the  United  States,  although 
there  is  a  marked  difference  of  judicial  opinion.  The  use 
of  persuasion  has  generally  been  held  legal,  but  intimida- 
tion and  coercion  have  been  condemned.  On  December 
5,  1921,  Chief  Justice  Taft  delivered  an  important  opin- 
ion on  the  subject  of  picketing,  giving  what  has  been 
characterized  as  the  most  complete  statement  of  the  law 
on  this  point  yet  enounced  by  the  Supreme  Court  of  the 
United  States.*  In  the  case  under  consideration  violent 
methods  appear  to  have  been  used,  and  the  attitude  of  the 
picketers  was  said  to  be  continuously  threatening,  with 
the  result  that  employees  and  would-be  employees  were 
put  in  fear  and  the  operation  of  the  plant  interfered 
with.  According  to  the  opinion  of  the  court,  there  are  limits 

•  American  Steel  Foundries  v.  Tri-city  Trades  Council,  42  Sup.  Ct. 
Rep.,  p.  72. 


320  Industrial  Unrest 

beyond  which  even  persuasion  and  communication  may 
not  go  without  violating  the  right  of  those  who  are  to  be 
influenced.  Protection  from  annoying  importunity  and 
intimidation  is  said  to  be  the  primary  right  of  the  em- 
ployees  in  their  choice  to  work  for  whom  they  will,  while 
the  employer  also  is  entitled  to  free  access  to  his  employees 
as  an  incident  to  his  property  and  business.  ' '  In  going  to 
and  from  work,  men  have  a  right  to  as  free  a  passage 
without  obstruction  as  the  streets  afford,  consistent  with 
the  right  of  others  to  enjoy  the  same  privilege."  Peace- 
ful communication  is  sanctioned,  but  "if  .  .  .  the  offer 
is  declined,  as  it  may  rightfully  be,  then  persistence, 
importunity,  following  and  dogging  become  unjustifiable 
annoyance  and  obstruction  which  is  likely  to  savor  of 
intimidation."  The  number  of  persons  permitted  to  be 
stationed  at  each  point  of  ingress  and  egress  was  limited 
to  one,  with  the  "right  of  observation,  communication, 
and  persuasion  but  with  special  admonition  that  their 
communication,  arguments,  and  appeals  shall  not  be 
abusive,  libelous,  or  threatening,  and  that  they  shall  not 
approach  individuals  together,  but  singly,  and  shall  not 
in  their  single  efforts  at  communication  or  persuasion  ob- 
struct an  unwilling  listener  by  importunate  following  or 
dogging  his  steps."  This,  however,  is  not  to  be  laid  down 
as  a  rigid  rule,  but  each  case  must  be  considered  on  its 
own  merits.  This  opinion  was  everywhere  heralded  as  a 
severe  defeat  for  trade  union  methods. 

The  law  and  court  decisions  governing  picketing  in  the 
various  states  are  conflicting.  California  courts,  which 
recognize  both  the  strike  and  the  boycott  as  legal,  con- 
demn picketing  as  necessarily  intimidating  and,  therefore, 
illegal.  The  courts  of  several  other  states  hold  the  same 
view,  and  at  least  three  states  have  statutory  provisions 
against  picketing.  Peaceful  picketing  is  lawful  in  many 
states.  It  is  extremely  difficult  to  determine  where  per- 
suasion ends  and  intimidation  begins,  and  this  fact  ac- 
counts for  much  of  the  conflict  of  judicial  opinion.  Many 
courts  incline  to  the  view  that  peaceful  picketing  is  im- 
possible. "There  is  no  such  things  as  peaceful  picketing. 


Industrial  Unrest  821 

The  very  fact  of  establishing  a  picket  line  by  appellants 
is  evidence  of  their  intention  to  annoy,  to  embarrass,  and 
to  intimidate  the  employees  of  the  appellee  company, 
whether  they  resort  to  violence  or  not.  The  decisions 
of  the  Supreme  Court  have  abundantly  established  that 
as  the  law  of  the  state."  7  ''There  is  and  can  be  no  such 
thing  as  peaceful  picketing,  any  more  than  there  can  bo 
chaste  vulgarity,  or  peaceful  mobbing,  or  lawful 
lynching."  8 

(d)  The  union  label. — In  addition  to  the  strike,  boycott, 
and  picket,  organized  labor  attempts  to  promote  the  cause 
of  unionism  by  creating  a  demand  for  union-made  goods. 
This  is  done  by  means  of  the  union  label  which  consists 
in  putting  the  union  stamp  upon  the  product  of  the 
craft.  Only  employers  who  maintain  union  standards 
of  labor  are  authorized  to  use  the  label.  The  union  label, 
therefore,  has  come  to  signify  to  the  workers  superior 
quality  of  material,  sanitary  conditions  of  production,  rea- 
sonable wages,  a  fair  working-day,  and  the  absence  of 
child  labor,  prison  labor,  and  other  forms  of  cheap  labor. 

The  union  label  originated  in  a  protest  against  Chinese 
labor  in  California.  Cigar  making  proved  an  attractive 
field  for  the  Chinese  who  flocked  to  it  in  large  numbers 
in  the  early  seventies.  As  a  means  of  limiting  the  em- 
ployment of  yellow  labor  in  their  trade  the  white  cigar- 
makers  of  San  Francisco  adopted  a  "white"  label  which 
was  attached  to  boxes  containing  cigars  made  by  white 
labor.  This  was  not  a  union  label  as  the  term  is  now 
used,  since  it  was  adopted  by  all  manufacturers  employ- 
ing white  workers,  regardless  of  union  affiliation,  but  the 
idea  originated  with  the  union  cigarmakers  in  1874.  The 
inception  of  the  union  label  is  found  among  the  cigar- 
makers  of  St.  Louis  in  1878,  who  were  out  on  strike 
for  improved  conditions,  and  found  it  necessary  to  secure 
public  support  by  differentiating  betwen  union-  and  non- 
union-made cigars.  A  red  label  was  attached  to  all  boxes 

T  Decision  of  tho  Appellate  Court  in  Chicago,  June  10,  1921,  in  rt 
the  striking  employees  of  the  American  Cigar  Company. 
•Atcbimm,  T.  A  8.  F.  Ry.  v.  Gee,  139,  Fed.  082  (1906). 


322  Industrial  Unrest 

containing  union-made  cigars.  In  1880  the  International 
Convention  of  the  Cigarmakers'  Union  adopted  the  label. 
In  1885  the  hatters'  label  appeared,  in  1886  the  label  of 
the  garment  makers,  and  in  1891  this  simple  agency  of  im- 
provement was  applied  by  the  printers,  iron-moulders, 
shoemakers,  horseshoers,  and  numerous  other  crafts. 
Within  a  quarter  of  a  century  the  union  label  spread  from 
a  single  industry  to  more  than  fifty  trades  in  North  Amer- 
ica. In  1920  there  were  fifty  labels  and  ten  cards  issued 
by  organizations  affiliated  with  the  American  Federation 
of  Labor  and  bearing  the  indorsement  of  that  body.  More- 
over, one  of  the  five  departments  of  the  federation  is 
known  as  the  Union  Label  Trades  Department.  This 
department  includes  all  national  and  international  unions 
using  labels,  cards,  or  buttons  upon  commodities,  and  ex- 
ists chiefly  to  promote  the  demand  for  union-made  prod- 
ucts. Local  unions  are  often  organized  into  label  leagues 
for  the  purpose  of  disseminating  information  concerning 
the  advantages  of  goods  bearing  the  label  of  the  various 
crafts.  The  1921  convention  of  the  American  Federation 
of  Labor  urged  the  use  of  the  label  by  all  affiliated  crafts. 
In  organizing  the  buying  power  of  the  workers  the  Union 
Label  League  movement  is  fashioning  a  powerful  weapon 
for  the  advance  of  unionism.  The  movement  for  union- 
labeled  goods  has  spread  to  the  United  Kingdom,  Canada, 
and  Australasia. 

The  unions  that  use  a  label  claim  many  advantages  for 
it;  namely,  that  it  represents  peaceful  collective  bargain- 
ing, and  forbids  both  strikes  and  lockouts  except  as  a 
last  resort ;  accomplishes  by  peaceful  means  and  with  ab- 
solute certainty  at  little  cost  that  which  the  strike  and  the 
boycott  achieve  at  great  cost  and  sacrifice;  affords  a 
guaranty  that  the  wages  earned  under  union  conditions 
are  spent  on  union  products  and  for  the  maintenance  of 
union  standards ;  enlists  the  cooperation  of  housewives  of 
the  nation  in  the  cause  of  labor  and  national  welfare; 
brings  under  one  standard  all  the  forces  that  are  opposed 
to  sweatshop  conditions,  tenement  house  production,  un- 
sanitary factory  conditions,  Chinese  labor,  night  labor, 


Industrial  Unrest  323 

and  child  labor;  organizes  the  purchasing  power  of  the 
unionized  millions,  and  substitutes  reason  for  force. 
Under  the  common  law  the  union  label  is  not  afforded  the 
protection  of  the  trade-mark,  and  no  injunction  can  be 
issued  to  restrain  its  unauthorized  use,  but  it  is  generally 
given  the  protection  of  statute  law.  Laws  passed  to  give 
the  union  label  recognition  have  usually  been  held  con- 
stitutional, and  not  class  legislation  as  those  who  oppose 
it  contend.  Appellate  courts  have  sustained  the  action 
of  the  lower  courts  in  establishing  the  legality  of  the  label. 
In  its  important  decision  in  the  Coronado  coal  case  in  June, 
1922,  the  United  States  Supreme  Court  stated:  "The  so- 
called  union  label,  which  is  a  quasi  trademark  to  indicate 
the  origin  of  manufactured  products  in  union  labor,  has 
been  protected  against  pirating  and  deceptive  use  by  the 
statutes  of  most  of  the  states,  and  in  many  states  authority 
to  sue  to  enjoin  its  use  has  been  conferred  on  unions. ' ' 

(e)  Blacklist. — The  majority  of  states  have  statutory 
provisions  against  the  practice  of  blacklisting,  but  such 
laws  have  been  ineffective  on  account  of  the  difficulty 
of  producing  satisfactory  evidence  against  employers, 
who  can  use  the  blacklist  secretly.  In  actual  practice  the 
blacklist  is  legal  where,  as  is  usually  the  case,  it  consists 
merely  in  the  exchange  of  information  and  leaves  each 
employer  free  to  act  on  his  own  judgment.  Most  of  the 
antiblacklist  statutes  merely  prohibit  the  circulation  of  in- 
formation as  to  who  are  members  of  unions,  or  willful 
attempts  and  combinations  to  prevent  persons  from  secur- 
ing employment.  In  all  probability  the  courts  would 
hold  such  laws  constitutional,  but  in  view  of  the  absolute 
right  of  the  employer  to  hire  and  fire,  he  is  apparently 
entitled  to  receive  from  former  employers  information 
concerning  an  employee,  and  can,  therefore,  easily  circum- 
vent the  provisions  of  the  statutes.  It  is  sometimes  held 
that  the  person  who  circulates  information  about  an  em- 
ployee's union  affiliation  and  activities  may  be  punished, 
but  the  employer  who  acts  upon  such  advice  is  within 
his  Icpal  rights.  Moreover,  the  telephone  and  other  mod- 
ern facilities  for  communication  make  it  possible  to  in- 


324  Industrial  Unrest 

stltute  an  effective  blacklist  system  that  cannot  be  de- 
tected easily,  even  if  earnest  attempts  were  made  to  enforce 
the  law. 

The  same  object  gained  by  the  blacklist  can  be  achieved 
by  using  the  whitelist,  or  an  employment  clearance  card 
which  must  be  presented  to  obtain  employment  and  ig 
surrendered  while  in  the  employ  of  the  company.  There 
is  no  redress  under  the  law  for  the  wage-earner  discharged 
for  union  sympathies  and  activities,  nor  are  statutes  con- 
stitutional which  aim  to  prevent  employers  from  coercing 
men  into  surrendering  union  affiliation  on  the  threat  of 
discharge.  The  blacklist  and  the  whitelist  can  be  applied 
secretly,  whereas  the  boycott,  which  is  the  workers' 
counter-weapon,  is  necessarily  attended  by  public  demon- 
strations, thus  placing  the  employer  at  a  distinct  ad- 
vantage. The  legality  of  the  blacklist  depends  upon  mo- 
tive or  intent  but  here,  even  more  than  in  the  case  of  the 
strike  and  boycott,  intent  is  difficult,  if  not  impossible, 
to  determine. 

The  Use  of  the  Injunction  in  Industrial  Disputes.— An 
injunction  is  an  order  issued  by  a  court  of  equity  for 
the  purpose  of  preventing  injury  to  a  person  or  property 
or  of  preserving  the  existing  conditions  until  the  final 
determination  of  rights.  This  restraining  power  of  the 
courts  has  assumed  great  importance  in  relation  to  the, 
use  of  strikes,  boycotts,  and  picketing,  Viewing  the  in- 
junction as  an  extraordinary  remedy  to  be  used  only  when 
property  and  personal  rights  are  imperiled  and  available 
remedies  at  law  are  inadequate  to  meet  the  exigency,  Great 
Britain  and  several  American  states  have  prohibited  its 
use  between  employers  and  employees  in  any  case  growing 
out  of  a  dispute  concerning  terms  and  conditions  of  em-, 
ployment,  unless  injury  through  violence  is  threatened, 
The  year  1888  marks  the  first  recorded  opinion  of  an  in* 
junction  in  labor  litigation,  and  even  at  the  close  of  the 
last  century  its  use  in  labor  disputes  was  exceptional.  In 
recent  years,  however,  the  courts  have  developed  a  tend- 
ency to  issue  restraining  orders  in  the  use  of  the  unfair 
list,  boycott  notices,  and  similar  practices  of  organised 


Industrial  Unrest 

labor.  A  Violation  of  such  ah  order  may  be  punished  by; 
fihe  of  imprisonment  as  constituting  a  Contempt  of  court^ 
and  trial  by  jury  is  not  allowed. 

The  scope  of  an  injunction  may  be  very  comprehensive 
and  its  effects  far-reaching,  since  it  can  be  applied  to  any. 
act  which  the  court  thinks  may  result  in  irreparable  in- 
jury to  property.  In  the  Buck  Stove  and  Range  case,  for 
example,  the  writ  prohibited  the  "officers  of  the  American 
Federation  of  Labor,  officers  and  members  of  affiliated 
unions,  friends,  sympathizers,  counsel,  Conspirators,  and 
co-conspirators"  from  making  any  reference  whatever 
to  the  fact  that  the  company  had  ever  been  involved  in 
any  dispute  and  disturbance  With  labor,  or  to  the  fact 
that  the  said  company  had  been  considered  Unfair,  had 
ever  appeared  on  the  Unfair  list,  or  on  ft  "we  don't 
patronize"  list  of  the  American  Federation  of  Labor  or 
any  other  organization;  and  also  enjoined  any  person 
from  referring,  either  directly  or  indirectly,  to  any  such 
dispute  by  printed,  written,  or  spoken  word.  During  the 
bituminous  coal  strike  of  1919,  the  Department  of  Justice 
asked  and  was  granted,  by  Judge  Anderson  of  the  United 
States  District  Court  at  Indianapolis,  an  injunction  re- 
straining the  officials  of  the  United  Mine  Workers  of 
America  from  calling  a  strike  and  from  distributing  strike 
funds.  The  order  went  further  and  instructed  the  officials 
to  have  the  men  return  to  work.  This  was  done,  but 
with  little  or  no  effect.  Thus  even  the  right  to  quit  work 
may  be  enjoined  under  extraordinary  conditions. 

Considerable  relief  was  expected  from  the  Clayton 
Anti-Trust  Act  of  1914,  which  provided  for  a  trial  by  jury 
in  contempt  cases  where  the  offense  charged  is  also  in- 
dictable as  a  crime,  and  Specified  that  injunctions  issued 
by  the  federal  Courts  shall  not  prohibit  the  quitting  of 
work,  the  refusal  to  patronize,  peaceful  picketing,  and 
peaceful  persuasion,  and  that  such  acts  are  not  to  be 
considered  violations  of  any  law  of  the  United  States, 
Whether  done  singly  or  in  Concert,  provided  they  are  not 
dbrie  ih  ah  unlawful  mahtier.  The  Clayton  law  was  char- 
acterized as  labor's  Magna  Charta  because  it  declared 


326  Industrial  Unrest 

that:  (1)  The  labor  of  a  human  being  is  not  a  commodity 
or  article  of  commerce;  (2)  labor  organizations  shall  not 
be  construed  as  illegal  combinations  or  conspiracies  in 
restraint  of  trade  under  federal  anti-trust  laws;  and  (3) 
no  preliminary  injunction  shall  be  served  without  notice 
to  the  opposite  party,  and  no  temporary  restraining  order 
without  similar  notice,  unless  it  is  evident  that  immediate 
and  irreparable  injury  will  result  before  notice  can  be 
served  and  a  hearing  held.  Recent  judicial  decisions  have 
disillusioned  the  workers  and  they  find  that  the  sub- 
stantive rights  of  employers  and  employees  are  not 
changed  materially  by  the  Clayton  law.  Moreover,  the 
federal  law  does  not  offer  relief  from  the  abusive  use 
of  the  injunction  by  state  courts. 

On  December  19, 1921,  the  Supreme  Court  of  the  United 
States,  by  a  five  to  four  decision,  declared  unconstitu- 
tional the  1913  Anti-Injunction  Law  of  Arizona,  which 
had  been  sustained  by  the  state  courts.  The  case  (Truax 
v.  Corrigan)  was  an  appeal  from  the  decision  of  the 
supreme  court  of  the  State  of  Arizona  refusing  an  injunc- 
tion in  a  labor  dispute.  An  injunction  had  been  asked 
to  prevent  picketing,  the  advertising  of  a  strike,  and  an 
alleged  conspiracy  and  boycott  to  injure  the  plaintiffs  in 
their  restaurant  business.  The  complaint  alleged  the  cir- 
culation of  handbills  containing  abusive  and  libelous 
charges  against  the  plaintiffs,  their  employees,  and  their 
patrons,  as  well  as  intimations  that  harm  would  result 
to  those  patronizing  the  restaurant.  The  majority  opinion 
of  the  United  States  Supreme  Court  held  that  the  actions 
of  the  strikers  were  not  lawful  persuasion  but  coercion, 
violating  the  fundamental  principle  that  the  plaintiffs' 
business  is  a  property  right,  and  that  free  access  for  em- 
ployees, owners,  and  customers  to  the  place  of  business 
is  incident  to  such  right.  A  law  which  operates  to  make 
legal  such  actions  "deprives  the  owner  of  the  business 
and  the  premises  of  his  property  without  due  process  of 
law,  and  cannot  be  held  valid  under  the  fourteenth  amend- 
ment," the  court  decided.  Moreover,  the  law  did  not  give 


Industrial  Unrest  327 

citizens  equal  protection,  but  conferred  class  privilege, 
with  the  result  that  the  property  right  of  another  class 
was  limited.  The  minority  opinion  held  that  the  law  did 
not  involve  arbitrary  and  unreasonable  classification  since 
the  relation  of  employer  and  employee  has  been  accepted 
as  a  basis  for  special  classification,  nor  was  there  any 
abridgment  of  the  fourteenth  amendment  to  the  Constitu- 
tion of  the  United  States. 

Moreover,  the  dissenting  opinion  contended  that  the 
extraordinary  relief  by  injunction  may  be  denied  to  a 
class,  through  the  exercise  of  the  police  power,  when  the 
legislature  of  the  state  deems  it  necessary  to  make  such 
denial  in  the  interest  of  public  welfare.  The  opinion  of 
Justice  Holmes  is  significant:  "Legislation  may  begin 
where  an  evil  begins.  If,  as  many  intelligent  people  be- 
lieve, there  is  more  danger  that  the  injunction  will  be 
abused  in  labor  cases  than  elsewhere  I  can  feel  no  doubt 
of  the  power  of  the  legislature  to  deny  it  in  such  cases." 
It  is  this  abusive  use  that  has  led  organized  labor  to 
demand  that  injunctions  shall  not  be  applied  in  disputes 
between  employers  and  employees  and  that  trial  by  jurVj 
shall  be  provided  in  contempt  cases. 

In  a  few  cases  injunctions  have  been  requested  by  unions. 
In  a  recent  case  (Schlesinger  v.  Quinto,  Sup.  Ct.  of  N.  Y., 
192  N.  Y.  Sup.  564)  the  International  Ladies'  Garment 
Workers'  Union  and  the  Joint  Board  of  Cloak  Makers' 
Union  of  the  City  of  New  York  secured  an  injunction 
against  the  Cloak,  Suit  and  Skirt  Manufacturers'  Protective 
Association.  The  writ  restrained  the  association  from  abro- 
gating a  collective  agreement  which  was  negotiated  in  May, 
1919,  and  was  to  be  effective  until  June,  1922.  Another 
important  case  (Carpenters'  Union  v.  Citizens'  Committee 
to  Enforce  the  Landis  Award — 1921-1922)  is  the  action  of 
the  Chicago  Carpenters'  Union  in  asking  the  Superior  Court 
of  Cook  County  for  an  injunction  against  a  committee  of 
citizens  organized  voluntarily  to  compel  compliance  with 
the  award  of  Judge  Landis  in  the  building  trades  dispute. 
The  court  recognized  the  illegality  of  the  committee's  action 


328  Industrial  Unrest 

but  denied  a  preliminary  injunction  on  the  ground  that 
the  union  had  often  acted  in  bad  faith  with  regard  to  in- 
dustrial relations. 

Violence  and  Force  in  Strikes. — Strikes  and  lockouts 
in  recent  years  have  not  been  accompanied  by  the  violenco 
and  loss  of  life  that  characterized  early  struggles  between 
labor  and  capital.  Notable  exceptions  include  the  guerrilla 
warfare  in  the  coal  fields  of  West  Virginia  and  Kentucky, 
the  mine  massacre  at  Herrin,  Illinois,  and  the  murders  in 
the  building  trades  in  Chicago,  in  1921  and  1922.  Impartial 
investigation  disclosed  little  violence  in  the  great  coal  and 
steel  strikes  of  1919,  and  prior  to  the  anthracite  and 
bituminous  coal  strike  of  1922  the  officials  of  the  United 
Mine  Workers  of  America  urged  the  men  to  conduct  the 
strike  peacefully.  Much  of  the  violence  that  has  been 
reported  in  the  daily  press  has  existed  only  in  the  imagina- 
tion of  news-hungry  reporters  who  sought  "a  story." 
The  unlawful  disturbances  that  have  existed  have  been 
incited  in  a  large  degree  by  a  radical  minority  among 
the  workers,  the  unreasonable  interference  with  free  and 
peaceful  assemblage  by  corporation-controlled  public  offi- 
cials, and  the  employment  of  professional  thugs  to  break 
strikes.  The  apparent  diminution  in  the  use  of  force  in 
connection  with  strikes  and  lockouts  may  be  attributed 
to  three  conditions:  (1)  Employers  appear  to  close  their 
establishments  during  a  disturbance  and  employ  strike- 
breakers in  fewer  cases  than  formerly;  (2)  public  opinion 
now  generally  condemns  the  employment  of  unlawful 
methods  in  industrial  disputes;  and  (3)  employers'  asso- 
ciations and  labor  organizations  manifest  a  strong  desire 
to  obtain  the  goodwill  and  sympathy  of  the  public,  which 
are  alienated  by  the  use  of  violence. 

Conclusions. — Unrest  among  the  industrial  masses  is 
the  product  of  unremedied  but  remediable  conditions  in 
social  and  economic  life,  and  will  continue  so  long  as 
economic  groups  have  divergent  interests  and  different 
points  of  view  concerning  the  control  of  industry  and 
the  distribution  of  the  product  of  industry.  There  is  no 
panacea  for  industrial  disturbances,  nor  are  these  con- 


Industrial  Unrest  329 

flicts  altogether  an  evil.  Strikes  and  other  manifestations 
of  dissatisfaction  are  the  growing  pains  of  industrial 
society,  and  often  constitute  healthy  protests  against  un- 
desirable conditions  of  employment,  the  continuation  of 
which  would  impede  social  progress.  Not  repression,  but 
direction  into  constructive  channels,  coupled  with  deter- 
mination to  introduce  justice  into  industrial  relations,  is 
needed  in  dealing  with  these  recurrent  rebellions  against 
things  as  they  are.  This  necessitates  the  creation  of  a 
spirit  of  fair  play  and  adequate  methods  of  adjustment. 


SELECTED  REFERENCES 

ADAMS,    T.    S,,   AND    SUMNER,   H.   L.,   Labor   Problems,   1905, 

Chap.  VI. 

BAKER,  R.  S.,  The  New  Industrial  Unrest,  1920. 
CARLTON,  F.  T.,  The  History  and  Problems  of  Organized  Labor, 

revised  edition,  1920,  Chap.  VII. 
COLE,  G.  D.  H.,  Labour  in  the  Commonwealth,  1919. 
CROWTHER,  SAMUEL,  Why  Men  Strike,  1920. 
GOMPERS,  SAMUEL,  Labor  and  the  Employer,  1920. 
GOODRICH,  C.  L.,  The  Frontier  of  Control,  1920. 
GROAT,  G.  G.,  An  Introduction  to  the  Study  of  Organized  Labor 

in  America,  1917,  Chaps.  X-XIV. 

HAMMOND,  M.  B,,  British  Labor  Conditions  and  Legislation  Dur- 
ing the  War,  1919,  Chap.  IX. 
OGBURN,  W.  F.,  Capital  and  Labor,  Cleveland,  F.  A.   (editor), 

Democracy  in  Reconstruction,  1919,  Chap.  XIV. 
OLDS,  MARSHALL,  The  High  Cost  of  Strikes,  1921. 
UNITED  STATES  BUREAU  OP  LABOR  STATISTICS,  Monthly  Labor 

Review,   9:199-218,   June,   1920;    11:189-196,    Sept.,    1920; 

12:155*169,  April,  1921;  14:181-189,  May,  1922. 
UNITED  STATES  BUREAU  OP  LABOR,  Annual  Report,  1894,  pp.  9-31. 
UNITED  STATES  COMMISSION  out  INDUSTRIAL  RELATIONS,  Final 

Report,  1916,  pp.  21-68. 
UNITED  STATES  INDUSTRIAL  COMMISSION,  Reports,  19:863-893, 

1902. 
W  ATKINS,  G.  S.,  Labor  Problems  and  Labor  Administration  in 

the  United  States  During  the  World  War,  1919,  Chaps.  Ill, 

IV  and  VII. 


PART  THREE 
AGENCIES  AND  METHODS  OF  READJUSTMENT 


CHAPTER  XV 
LABOR  ORGANIZATIONS— HISTORY  AND  TYPES 

The  Reasons  for  Organization. — Labor  organizations 
exist  primarily  for  the  purpose  of  collective  bargaining. 
Collective  bargaining  is  the  joint  determination  of  the 
terms  of  employment  by  an  organization  of  workers  and 
an  employer,  or  an  association  of  employers,  acting 
through  their  duly  authorized  representatives.  Although 
the  collective  bargain  is  as  old  as  the  individual  bargain, 
it  was  the  failure  of  the  latter  to  safeguard  the  interests 
of  the  workers  that  led  to  the  extension  of  collective 
action.  Collective  bargaining  is  not  confined  to  trade 
unions.  Long  before  the  modern  trade  union  became  an 
established  institution  informal  deputations  of  workers 
endeavored  to  improve  their  conditions  of  employment  by 
group  action,  and  to-day  shop  committees,  works  councils, 
and  so-called  "company  unions"  provide  a  form  of  col- 
lective bargaining  which  is  frequently  independent  of 
trade  unionism.  Moreover,  collective  bargaining  is  really 
carried  on  by  associations  of  agriculturists,  physicians, 
dentists,  manufacturers,  and  other  professional  and  busi- 
ness groups  which  in  one  way  or  another  seek  to 
standardize  the  price  of  services  and  products.  Trade 
unions,  nevertheless,  are  the  most  powerful  exponents  of 
true  collective  bargaining  in  the  industrial  world. 

Unionism  and  collective  bargaining  cannot  be  evaluated 
properly  without  weighing  carefully  the  relative  advan- 

330 


Labor  Organizations — History  and  Types     331 

tages  and  disadvantages  of  the  individual  bargain.  De- 
fense of  individual  bargaining  rests  usually  on  what  are 
commonly  stated  to  be  the  disadvantages  of  the  collective 
bargain  in  relation  to  freedom  of  contract.  Collective 
bargaining  implies  a  limitation  of  freedom  to  negotiate 
individual  contracts  and  agreements.  Such  limitation  is 
obnoxious  to  the  spirit  of  individualism  which  protests 
any  outside  interference  with  the  economic  freedom  of  the 
individual.  Membership  in  an  employers'  association,  a 
labor  organization,  or  any  other  institution  implies  a 
willingness  to  subordinate  the  will  of  particular  individ- 
uals to  the  collective  will.  Collective  bargaining  presup- 
poses the  acceptance  of  agreements  and  contracts  that  are 
determined  collectively  through  the  agents  of  the  group.1 
This  is  manifestly  a  surrender  of  certain  individual  rights 
and  privileges  and  is  not  infrequently  condemned  as  an 
infringement  upon  the  "natural  rights"  of  the  individual 
to  unrestricted  economic  activity.  Individual  bargaining 
is  commended  as  promoting,  and  collective  bargaining  is 
condemned  as  destroying  both  the  freedom  of  the  worker 
to  sell  his  labor  under  any  conditions  he  deems  acceptable 
and  .the  freedom  of  the  employer  to  buy  labor  on  the 
cheapest  market  and  run  his  business  as  he  sees  fit. 

Bargaining  individually  with  the  employer,  the  worker 
is  at  a  serious  disadvantage  because  of  differences  in 
economic  status,  bargaining  knowledge  and  skill,  the 
nature  of  the  labor  supply,  and  other  conditions.  The 
employer  usually  is  not  forced  to  take  the  labor  of  any 
particular  worker,  since  substitution  is  easy  except  in 
the  case  of  the  most  skilled  groups,  and  even  in  skilled 
trades  machine  processes  tend  to  increase  the  possibility 
of  substitution.  The  worker  enjoys  no  such  advantage, 
since  he  must  usually  accept  the  particular  job  offered 
him  or  else  face  the  alternative  of  charity  or  starvation. 
The  employer  can  afford  to  wait  for  a  worker  who  will 
accept  the  conditions;  the  worker  cannot  wait  for  the 
employer  who  will  hire  him  at  attractive  terms.  Labor 
is  perishable;  a  day's  labor  lost  is  not  regainable.  Re- 

1  Sidney  and  Beatrice  Webb,  Industrial  Democracy,  1920  ed.,  p.  173. 


332    Labor  Organizations — History  and  Types 

fusal  of  a  job  may  mean  to  the  worker  the  loss  of  life 
and  serious  danger  to  the  health  of  those  dependent  upon 
him,  whereas  the  employer  stands  to  lose  just  so  much 
profit.  The  successful  employer  has  a  reserve  of  property 
and  wealth  that  furnish  a  basis  of  credit;  the  Worker 
possesses  no  such  financial  or  credit  reserve.  To  the 
Worker  unemployment  means  the  accumulation  of  debt 
or  the  acceptance  of  charity.  The  employers'  superior 
knowledge  of  labor  conditions  and  commodity  markets, 
coupled  with  their  greater  experience  and  skill  in  making 
contracts,  gives  them  the  advantage  in  bargaining  with 
the  workers.  "The  making  of  bargains  and  agreements, 
which  occupies  only  an  infinitesimal  fraction  of  a  work- 
man's life  and  thought  makes  up  the  daily  routine  of  the 
Commercial  man."* 

Finally,  competition  among  workers  for  jobs  is  almost 
always  severe  on  account  of  the  labor  reserve,  and  the 
public  demands  for  cheap  goods.  There  is  practically 
never  an  equilibration  of  the  demand  for  and  the  supply 
of  labor.  Thus  there  is  likely  to  be  within  any  group 
of  workers  an  oversupply  of  labor,  and  this  excess  is 
usually  greatest  among  those  who  are  the  weakest  bar- 
gainers; namely^  the  unskilled.  Under  such  conditions, 
a  progressive  deterioration  of  the  terms  of  employment  is 
almost  inevitable,  the  standard  being  reduced  to  the  level 
commanded  by  the  weakest  bargainer  in  the  group.  The 
"public,"  which  is  so  anxious  to  protect  its  own  interests 
in  periods  of  industrial  Strife,  gives  little  thought  to  the 
possibility  that,  in  order  to  supply  commodities  at  low 
prices,  fellow  citizens  in  industry  may  have  to  accept  a 
wage  scale  that  means  malnutrition,  poverty,  and  charity. 

To  prevent  this  progressive  deterioration  in  the  stand- 
ards of  employment  ftnd  to  improve  the  economic  status 
of  the  workers,  collective  bargaining  is  introduced,  which 
excludes  from  determination  of  the  labor  contract  the 
exigencies  of  individual  circumstances.  Collective  bar- 
gaining substitutes  group  action  for  individual  action  in 
negotiating,  interpreting,  and  enforcing  contracts  and 
p,  182. 


Labor  Organizations — History  and  Types    333 

agreements.  Collective  bargaining  implies  certain  prin- 
ciples of  procedure.  (1)  Wherever  competition  may  arise 
among  the  workers  the  cardinal  principle  of  true  col- 
lective bargaining  requires  uniformity  of  wages  and  con- 
ditions of  work.  There  must  be  a  uniform  minimum  of 
standards  below  which  no  member  of  the  group  will  con- 
sent to  work.  (2)  The  principle  of  standardization  must 
be  expressed  in  restrictive  regulations  that  will  prevent 
changes  in  the  terms  of  the  labor  agreement  during  the 
specified  life  of  the  compact.  These  fundamental  prin- 
ciples of  collective  bargaining  can  be  maintained  most 
effectively  by  organization  of  the  workers.  True  collective 
bargaining  can  exist  only  when  both  employers  and  em- 
ployees are  organized  effectively  in  independent  associa- 
tions for  the  negotiation  of  trade  agreements.  This  is 
fundamental  to  uniformity  of  requirements,  standardiza- 
tion of  conditions,  equitable  interpretation  of  agreements, 
and  protection  of  both  groups  of  interests.  For  the 
workers,  collective  bargaining  finds  its  true  expression  in 
trade  unionism;  for  the  employers,  the  employers'  associa- 
tion is  the  logical  medium. 

Types  of  Unionism. — Viewed  in  ita  broadest  aspects  a 
labor  organization  is  an  association  of  employees  for  tho 
purpose  of  improving  their  economic,  legal,  political,  and 
social  status.  Of  these  purposes  the  promotion  of  economic 
well-being  is  undoubtedly  tho  most  prominent.  Workers 
seek  to  improve  their  legal  and  political  position  in  order 
that  their  struggle  for  better  wages,  hours,  and  conditions 
of  employment  may  be  more  successful.  Generally  speak- 
ing, there  are  three  distinct  structural  types  of  labor  or- 
ganizations ;  namely,  trade  unions,  labor  unions,  and  indus- 
trial unions. 

1.  The  trade  union  is  an  organization  of  wage-earners 
engaged  in  a  single  trade  or  several  closely  related  trades. 
Each  trade  association  seeks  through  collective  bargaining 
to  secure  better  conditions  of  employment  for  its  own  par- 
ticular group  of  workers.  For  this  reason  the  trade  union 
is  often  described  an  being  "trade-conacioua,"  having  little 
concern  for  the  general  solidarity  of  the  working  class. 


334     Labor  Organizations — History  and  Types 

The  familiar  weapons  of  trade  unions  are  the  strike, 
boycott,  unfair  list,  and  union  label.  Reliance  upon  polit- 
ical action  is  indirect  rather  than  direct,  the  general  policy 
being  to  work  with  existing  political  parties,  rewarding 
labor's  friends  and  punishing  labor's  enemies.  This  is  es- 
pecially true  of  trade  unionism  in  the  United  States.  In 
some  countries,  such  as  Great  Britain,  the  workers  have 
their  own  political  parties  so  that  their  political  representa- 
tion is  direct.  The  Brotherhood  of  Locomotive  Engineers 
and  the  International  Typographical  Union  are  examples 
of  trade  unionism  in  the  United  States. 

2.  The  labor  union  attempts  to  bring  within  one  organ- 
ization all  workers  without  distinction  as  to  craft  or  indus- 
try.    It  is   thus   essentially   an   amalgamation   of   wage- 
earners,  and  even  employers  and  other  members  of  the 
so-called  middle  class  have  sometimes  been  taken  into  the 
organization.    The  fundamental  ideal,  however,  is  the  unity 
of  all  wage-earners.    The  major  emphasis  is  placed  on  non- 
industrial  action,   that  is,   on  social  legislation,   political 
reforms,  education,  producers '  cooperation,  consumers'  coop- 
eration, and  socialistic  schemes.  The  labor  union  is  concilia- 
tory rather  than  warlike,  and  projects  the  doctrine  that  the 
interests  of  employers  and  employees  are  identical  and 
harmonious.     Its  program,  in  distinct  contrast  with  the 
immediate  and  practical  program  of  trade  unionism,  is 
permeated  with  idealism.    Whereas  the  government  of  the 
labor  union  is  highly  centralized,  that  of  the  trade  union 
is  decentralized,  vested  in  the  local  craft  organizations.  The 
Knights  of  Labor  is  representative  of  this  type  of  unionism. 

3.  The  industrial  union  is  an  association  of  wage-earners 
employed  in  a  given  industry.     Homogeneous  combination 
of    all   workers — skilled,    semiskilled,    and   unskilled — en- 
gaged in  a  given  field  of  production  or  distribution  is  its 
aim.    Craft  lines  are  thus  ignored  in  building  the  structure 
of  industrial  unionism.    For  example,  in  the  mining  indus- 
try coal  diggers,  helpers,  firemen,  shot  firers,  door  boys, 
haulers    and    drivers,    engineers,    spraggers,    timbermen, 
laborers,  dumpers,  check-weighmen,  and  other  mine  work- 
ers are  assembled  in  one  homogeneous  organization.     The 


Labor  Organizations — History  and  Types    335 

fundamental  purpose  of  the  industrial  union  is  to  make  the 
workers'  organization  coextensive  with  the  integrated  struc- 
ture of  the  capitalistic  organization.  The  United  Mine 
Workers  of  America,  the  International  Union  of  Mine,  Mill, 
and  Smelter  Workers  (formerly  the  Western  Federation  of 
Miners),  and  the  Amalgamated  Clothing  Workers  are 
examples  of  industrial  unionism.  The  Industrial  Workers 
of  the  World  (Chicago  branch)  represents  the  extreme  left 
or  ultraradical  wing  of  industrial  unionism.  This  extreme 
group  believes  in  class  war,  direct  action,  and  sabotage,  and 
denounces  craft  unionism  as  reactionary  and  ineffective. 

Unionism  has  also  been  classified  according  to  its  func- 
tional characteristics.3  According  to  this  classification  the 
various  types  include:  business  unionism,  friendly  or  up- 
lift unionism,  revolutionary  unionism,  and  predatory 
unionism. 

1.  Business  unionism  is  characterized  by  trade  conscious- 
ness rather  than  class  consciousness;  conservative  accep- 
tance of  the  capitalistic  system;  emphasis  upon  immediate 
and  practical  reforms  such  as   increased  wages,  shorter 
hours,  and  better  conditions  of  work ;  insistence  upon  volun- 
tary rather  than  compulsory  arbitration  of  industrial  dis- 
putes ;  freedom  to  use  the  strike,  boycott,  unfair  list,  union 
label,  and  other  methods  of  effective  collective  bargaining; 
and  democratic  control  of  union  organization.     The  ma- 
jority of  craft  unions  are  of  the  business  type.    The  most 
striking  examples  are  th,e  railroad  brotherhoods. 

2.  Friendly  or  uplift  unionism,  like  business  unionism, 
is  conservative.     The  friendly  or  uplift  union,  however, 
is  inspired  with  a  greater  measure  of  idealism,  and  places 
the  emphasis  upon  education,  social  insurance,  profit-shar- 
ing, labor  copartnership,  labor  legislation,  cooperation,  and 
other  schemes  which  are  designed  to  promote  the  general 
welfare  of  the  workers.    Collective  bargaining  is  commonly 
practiced,  but  strikes  and  other  weapons  are  used  only 
as  a  last  resort.    The  Knights  of  Labor  is  the  best  example 
of  this  type  of  unionism. 

3.  Revolutionary  unionism,  as  the  term  suggests,  is  char- 
•B.  F.  Hoiic,  Trade  Unionism  in  the  United  States,  Chap.  II. 


336    Labor  Organizations— History  and  Types 

acterized  by  a  very  definite  class  consciousness,  deprecates 
the  dismemberment  of  the  labor  movement  into  petty  craft 
organizations  unable  to  cope  with  corporate  associations, 
believes  firmly  in  the  solidarity  of  labor,  condemns  the 
capitalistic  system,  advocates  an  industrial  commonwealth 
controlled  by  and  functioning  for  the  workers,  opposes 
opportunistic  methods  of  collective  bargaining,  refuses  all 
compromises  with  capitalism,  and  insists  upon  real  de- 
mocracy within  unionism  itself.  Eevolutionary  unionism 
in  America  comprises  two  distinct  groups;  namely,  (a)  the 
socialistic  group,  comprising  those  who  seek  to  establish 
a  socialist  state  by  political  action,  and  (b)  the  quasi- 
anarchistic  group,  consisting  of  those  who  desire  an  indus- 
trial  commonwealth  founded  upon  free  associations  of 
workers  owning  and  controlling  their  industries,  such  a 
commonwealth  to  be  gained  by  industrial  rather  than 
political  action.  The  former  group  is  represented  to  a 
large  extent  by  the  International  Union  of  Mine,  Mill, 
and  Smelter  Workers ;  and  the  latter  group  by  the  Chicago 
branch  of  the  Industrial  Workers  of  the  World. 

4.  Predatory  unionism  is  less  distinctly  a  type  than  those 
already  discussed.  Generally  speaking,  this  type  is  oppor- 
tunistic, shifting  from  conservatism  to  radicalism  as  ex- 
pediency dictates.  In  achieving  its  aims  ethical  and  legal 
considerations  are  likely  to  be  disregarded.  It  comprises 
(a)  hold-up  unionism,  and  (b)  guerrilla  unionism.  The 
former  is  dominated  by  autocratic  bosses  and  corrupt  busi- 
ness agents  who  accept  bribes  from  employers  in  exchange 
for  promises  not  to  call  strikes  and  to  keep  the  contractors 
supplied  with  union  men.  The  officials  of  this  group  have 
been  accused  of  dispensing  union  labels  for  financial  con- 
siderations, and  of  acting  in  collusion  with  employers  in 
eliminating  competitive  conditions,  thus  maintaining  the 
price  level  and  passing  the  burden  to  the  consumer. 
Monopoly,  corruption,  and  violence  are  its  common 
methods.  Hold-up  unionism  has  often  been  found  in  the 
building  trades,  and  recent  investigations  in  Chicago  and 
New  York  indicate  that  it  is  still  extant  in  our  great 
cities.  As  a  member  of  the  building  trades  put  it  to  the 


Labor  Organizations — History  and  Types     337 

writer:  "The  corrupt  union  machine  in  the  building 
trades  of  some  of  our  cities  is  no  more  respectable  than 
the  corrupt  political  machine,  with  which  it  is  not  seldom 
allied."  Guerrilla  unionism,  is  different  from  hold-up 
unionism  in  that  it  is  unlikely  to  make  any  compromises 
with  the  employer,  but  rather  maintains  its  antagonism 
to  the  interests  of  the  employing  group.  "It  is  secret, 
violent,  and  ruthless,  seemingly  because  it  despairs  of 
attaining  what  it  considers  to  be  legitimate  by  business, 
uplift,  or  revolutionary  methods. ' '  *  The  campaign  of 
violence  and  sabotage  conducted  by  the  bridge  and  struc- 
tural iron  workers  several  years  ago  and  the  violent  tac- 
tics of  Chicago  building  trades  during  1921  and  1922  are 
examples  of  guerrilla  unionism  in  action. 

No  classification  of  unionism  is  absolutely  accurate  nor 
can  it  long  remain  even  approximately  so.  Unionism  is 
an  indefinite,  complex,  and  varying  phenomenon.  Within 
the  same  trade  union  there  may  be  found  trade-conscious 
and  class-conscious  individuals.  A  labor  organization,  like 
any  other  association  of  human  beings,  may  have  simul- 
taneously ultraconservatives,  liberals,  and  revolutionists 
among  its  members.  A  plethora  of  beliefs  are  reflected 
in  the  organization's  program  which  may  include  ele- 
ments of  business  unionism  along  with  uplift,  predatory, 
and  revolutionary  practices.  Moreover,  unionism  is  a 
rapidly  changing  institution.  An  organization  which  in 
one  period  may  be  conservative  may  at  a  later  period 
be  revolutionary  and  vice  versa,  as  is  illustrated  by  the 
histories  of  the  Western  Federation  of  Miners  and  the 
Railroad  .Brotherhoods.  Once  extremely  radical,  the 
Western  Federation  of  Miners  is  now  fairly  conservative, 
while  the  traditionally  conservative  Railroad  Brother- 
hoods have  endorsed  recently  a  program  for  national- 
ization of  the  railroads.  In  the  process  of  social  evolution 
the  structure  of  unionism  must  be  adjusted  to  its  changing 
function.  As  the  late  Professor  Hoxie  pointed  out,  the 
functions  of  unionism  determine  largely  its  structure. 
After  all,  structure  or  type  of  organization  is  mainly  a 

'Hoxie,  op.  cit.,  p.  51. 


338    Labor  Organizations — History  and  Types 

means  to  an  end.  The  machinery  of  control  and  adminis- 
tration is  an  agency  in  the  achievement  of  immediate  and 
ultimate  purposes.  The  structure  of  unionism  is  integrated 
as  its  functions  expand.  In  response  to  changing  indus- 
trial conditions  and  consequent  enlarging  of  functions, 
the  structure  of  unionism  passes  from  isolated  craft  asso- 
ciations to  nationalization  of  these  locals  and  ultimately 
into  a  federation  or  an  amalgamation  of  trade  organiza- 
tions. Combination  and  integration  in  the  industrial 
structure  result  in  a  movement  for  industrial  unions. 
Powerful  forces  operate  unceasingly  to  determine  the 
changing  structural  and  functional  aspects  of  labor  or- 
ganizations. 

The  Origin  of  Trade  Unionism. — The  origin  of  unionism 
is  a  controverted  question.  It  is  often  contended  that 
the  beginning  of  labor  organizations  is  to  be  found  in  the 
medieval  gilds,  but  authoritative  historians  of  the  labor 
movement  discredit  the  attempt  to  draw  an  analogy  be- 
tween the  modern  trade  unions  and  the  early  gilds.  Al- 
though they  recognize  that  trade  unionism  in  its  his- 
torical aspects  is  not  an  isolated  phenomenon  divorced 
entirely  from  the  evolution  of  associations,  these  historians 
are  of  the  belief  that  the  forms  of  association  that  ob- 
tained prior  to  the  close  of  the  seventeenth  century  were 
not  very  similar  to  the  modern  trade  union  and  had  little, 
if  any,  influence  upon  the  rise  and  development  of  what 
is  generally  known  as  the  labor  movement.  In  support 
of  this  position  it  is  pointed  out  that  the  medieval  gilds 
were  associations  of  business  enterprisers  who  assembled 
raw  materials,  owned  the  instruments  of  production,  con- 
trolled and  directed  industry,  and  sold  the  product; 
whereas  the  modern  trade  union  is  essentially  an  associa- 
tion of  wage-earners,  who  have  no  title  to  the  machinery 
of  production  and  distribution  but  who  sell  their  labor- 
power  to  the  employer  for  a  stipulated  sum.5  Between 
the  fourteenth  and  the  eighteenth  centuries  sporadic  asso- 
ciations of  journeymen  exercised  many  of  the  functions 

•  For  an  authoritative  discussion  of  the  origin  of  unionism  see 
Webb,  History  of  Trade  Unionism,  1920  ed.,  Chap.  I. 


Labor  Organizations — History  and  Types     339 

of  modern  labor  organizations,  but  they  were  so  ephemeral 
in  character  that  they  can  hardly  be  described  as  the 
counterpart  of  the  latter  organizations.  So  indefinite  and 
uncertain  was  the  existence  of  these  experiments  in  asso- 
ciation down  to  the  close  of  the  eighteenth  century,  that 
trade  unionism  is  commonly  described  as  a  product  of 
the  nineteenth  century.  Most  responsible  for  the  definite 
and  permanent  organization  of  the  workers  were  the  con- 
ditions incident  to  the  Industrial  Revolution,  beginning 
about  the  middle  of  the  eighteenth  century,  which  resulted 
in  a  distinct  separation  of  the  employer  and  employee 
functions  and,  consequently,  in  a  definite  cleavage  be- 
tween the  capitalist-employer  and  the  wage-earning 
classes. 

Unionism  emerged  in  the  United  States  towards  the 
close  of  the  eighteenth  and  during  the  early  years  of  the 
nineteenth  centuries.  Labor  organizations  were  found 
here  in  the  seventeenth  century  but  these  were  primarily 
associations  of  workmen  who,  like  the  gildsmen  of  medieval 
England,  exercised  the  functions  of  laborer,  master,  and 
merchant.  Limitation  of  the  number  of  legal  craftsmen, 
regulation  of  the  quality  of  the  product,  and  the  deter- 
mination and  maintenance  of  the  customary  price  were 
the  purposes  of  these  organizations.  The  development 
of  trade  unionism  in  the  United  States  falls  roughly  into 
several  more  or  less  definite  periods  between  which  there 
are  no  absolutely  distinct  lines  of  demarcation.  These 
periods  include:  (1)  The  Emergence  of  Trade  Unionism, 
1792-1827;  (2)  Utopianism  and  Political  Experiments, 
1827-1850;  <3)  Reorganization  and  the  Beginning  of  Na- 
tionalization, 1850-1857;  (4)  Revival  of  Trade  Unionism, 
1857-1866;  (5)  Attempted  Amalgamation,  1866-1886;  (6) 
The  Predominance  of  Federation  and  the  Rise  of  Indus- 
trial Unionism,  1886  to  the  present.  Only  a  general  sum- 
mary of  the  outstanding  developments  in  each  of  these 
periods  is  possible  here. 

The  Emergence  of  Trade  Unionism,  1792-1827.— Trade 
unionism  in  the  modern  sense  did  not  exist  in  the  colonial 
period  of  American  history.  The  quickened  pace  of  in- 


340     Labor  Organizations — History  and  Types 

dustrial  development  following  the  Declaration  of  Inde- 
pendence in  1776,  and  the  adoption  of  the  Constitution  in 
1789,  resulted  in  economic  changes  pregnant  with  sig- 
nificance for  the  wage-earners  of  America.  The  domestic 
system  of  industry  was  giving  way  to  the  factory  and 
contract  system;  masters  and  journeymen  were  becoming 
sharply  differentiated;  aggregations  of  journeymen  work- 
ers arose  in  each  craft ;  the  commodity  market  was  widen- 
ing; new  machine  processes  were  breaking  down  rigid 
apprenticeship  regulations;  and  lower  wage  scales  and 
longer  hours  were  sought  by  the  master  class.  The 
friendly  and  benevolent  societies  of  mechanics  and  jour- 
neymen formed  in  the  colonial  period  could  not  meet 
these  changing  conditions.  About  1785  skilled  groups 
such  as  the  printers,  shoemakers,  tailors,  and  carpenters 
organized  societies  to  resist  increasing  control  of  the  local 
market  by  the  new  enterpriser  class.  The  shoema'kers 
of  Philadelphia  were  organized  in  1792;  about  1794  the 
printers  of  New  York  had  their  Typographical  Society, 
and  similar  organizations  were  found  among  the  printers 
in  Baltimore  and  Philadelphia.  The  list  of  important 
craft  unions  included  the  Philadelphia  Carpenters,  1791 ; 
the  Philadelphia  Society  of  Journeymen  Cordwainers, 
1794;  the  Baltimore  Tailors,  1795;  the  Baltimore  Typo- 
graphical Society,  1803;  and  the  New  York  Society  of 
Journeymen  Shipwrights,  1803.  These  early  societies 
were  local,  ephemeral,  and  distinctly  craft  organizations. 
Industry  was  organized  on  the  craft  basis.  No  intertrade 
associations  existed.  Unions  were  craft-conscious  and 
their  interests  were  confined  to  the  limits  of  the  trade. 

Although  much  emphasis  was  placed  on  mutual  and 
friendly  benefits,  such  as  sickness  and  funeral  aid,  the 
roster  of  activities  included  resistance  to  competition  with 
inferior  and  "illegal"  workmen  by  the  enforcement  of 
apprenticeship  rules ;  defense  against  prosecution  for  com- 
bination or  conspiracy;  collective  bargaining;  and  the 
regulation  of  wages,  hours,  and  conditions  of  employ- 
ment. This  has  been  well  described  as  the  "germinal" 
period  of  the  American  labor  movement. 


Labor  Organizations — History  and  Types    341 

Utopianism  and  Political  Experiments,  1827-1850. — It 
was  not  until  after  the  first  quarter  of  the  nineteenth 
century  that  organization  of  labor  became  a  significant 
factor  in  the  industrial  life  of  the  United  States.  The 
period  between  1827  and  1850  is  characterized  by  a  dis- 
tinct movement  for  intertrade  associations  known  as 
trades'  unions,  the  establishment  of  communistic  com- 
munities, and  political  action.  The  modern  trades'  union 
— the  association  of  craft  unions  or  labor  societies — 
originated  with  the  "Mechanics'  Union  of  Trade  Associa- 
tions" in  Philadelphia  in  1827.  City  associations  and 
national  trade  unions  emerged  to  make  the  structure  of 
unionism  coextensive  with  the  widening  area  of  competi- 
tive conditions.  Intercraft  organization  constituted  a 
definite  step  forward  in  the  solidarity  of  labor.  Soon 
workingmen's  parties  were  formed  in  the  cities  of  Phila- 
delphia, New  York,  Boston,  Albany,  and  other  industrial 
centers.  Local  labor  parties  were  formed  in  no  less  than 
fifteen  states.  The  grievances  of  the  workers  were  at- 
tributed to  the  inflation  of  prices  and  cost  of  living  pre- 
ceding the  panic  of  1837,  educational  and  political  in- 
equalities, inadequate  wages,  excessive  hours  of  labor, 
undesirable  conditions  of  employment,  child  labor,  convict 
labor,  imprisonment  for  debt,  and  the  sweatshop  system. 
Numerous  legislative  and  economic  reforms  were  incor- 
porated into  the  program  of  these  workingmen's  parties. 

With  the  organization  of  the  National  Trades'  Union, 
which  held  its  first  annual  convention  in  1834,  there  ap- 
peared somewhat  of  a  reaction  against  political  activities, 
although  political  demands  did  not  cease.  National  trade 
unions  were  organized  among  the  cordwainers,  carpenters, 
hand-loom  weavers,  printers,  comb-makers  and  probably 
other  craftsmen.  Between  1827  and  1837  the  prominent 
political  and  industrial  demands  of  labor  included  the 
ten-hour  day,  restriction  of  child  labor,  abolition  of  im- 
prisonment  for  debt,  discontinuance  of  the  use  of  convict 
labor  in  competition  with  free  labor,  free  schools,  me- 
chanics' lien  law,  exemption  of  wages  and  tools  from 
seizure  for  debt,  cheaper  legal  procedure  and  redress, 


342    Labor  Organizations — History  and  Types 

direct  election  of  public  officials,  and  the  abolition  of 
sweatshops.  Labor  also  opposed  the  granting  of  charters 
to  banks  and  other  monopolies,  religious  legislation,  ex- 
emption of  church  property  from  taxation,  and  the  lot- 
tery system,  and  demanded  the  reform  of  the  militia 
system.  Robert  Dale  Owen,  the  English  manufacturer 
and  reformer,  was  actively  engaged  in  the  movement  for 
educational  reform  in  the  United  States  preceding  1834. 
In  the  decade  of  the  thirties  unionism  made  steady  prog- 
ress, aided  by  high  prices  and  fiat  money.  By  1836  Phila- 
delphia had  fifty-three  trade  unions,  Newark  and  Boston 
sixteen  each,  Baltimore  twenty-three,  and  New  York 
fifty-two.  The  membership  of  trade  unions  in  the  sea- 
board cities  aggregated  about  300,000.  The  growth  of 
the  trade  union  movement  was  arrested  by  the  panic  of 
1837  which  disrupted  the  financial  system  of  the  United 
States.  Prosecuted  for  conspiracy  and  destitute  of 
friends,  labor  organizations,  with  few  exceptions,  failed 
to  survive  the  period  of  depression. 

Although  political  action  had  been  largely  discredited 
as  a  result  of  the  seemingly  feeble  attempts  in  the  early 
part  of  this  period,  the  pendulum  swung  again  to  political 
action  in  the  decade  of  the  forties.  The  failure  of  trade 
unionism  drove  men  to  seek  help  through  other  methods 
and  for  a  decade  humanitarianism,  utopianism,  socialism, 
and  labor  unionism  predominated.  Reformers  and  intel- 
lectuals had  their  innings.  Albert  Brisbane,  Horace  Gree- 
ley,  Charles  A.  Dana,  and  John  G.  Whittier  were  among 
the  leaders  of  the  new  movement  for  amelioration  of  the 
workers.  Numerous  labor  councils  and  congresses  were 
held  and  many  associations  of  workingmen  were  formed. 
The  New  England  "Workingmen 's  Association,  the  Na- 
tional Reform  Association,  and  the  New  England  Pro- 
tective Union  came  into  existence  between  1844  and  1845. 
The  first  Industrial  Congress  convened  in  New  York  City 
in  1845.  Land  reform,  cooperation,  abolition,  the  ten- 
hour  day,  free  schools,  and  the  establishment  of  com- 
munistic communities  were  advocated.  The  spirit  of 
utopianism  was  rampant,  resulting  in  the  establishment  of 


Labor  Organizations — History  and  Types    343 

Brook  Farm  and  other  experiments  by  Utopian  socialists 
who  were  disciples  of  Charles  Fourier,  the  French  ideal- 
ist. Harmony  of  industrial  interest  was  taught  and  the 
class  struggle  denounced.  Misery  of  the  masses  and  all 
poverty  were  to  be  abolished  through  communism.  These 
later  Utopian  schemes  failed  as  did  the  earlier  community 
established  by  Robert  Owen  at  New  Harmony,  Indiana, 
in  the  first  quarter  of  the  century.  The  demands  for  free 
schools,  restriction  of  woman  and  child  labor,  and  free 
land  were  realized  to  some  extent. 

Reorganization  and  the  Beginning  of  Nationalization, 
1850-1857. — American  workmen  were  not  generally  at- 
tracted to  the  Utopian  socialistic  experiments,  such 
schemes  being  interpreted  as  wild  ventures  in  idealism. 
Immediate  and  practical  reforms,  including  higher  wages, 
shorter  hours,  improved  factory  conditions  and  protective 
legislation  were  more  to  the  workers'  liking.  Even  co- 
operation and  profit-sharing  plans  appeared  impractical. 
It  was  inevitable,  therefore,  that  the  workers  should  re- 
turn to  a  revival  of  craft  unionism  and  an  attempt  to 
federate  the  different  craft  units  into  national  trade  unions. 
Markets  were  becoming  national  and  the  area  of  com- 
petition was  widening  as  a  consequence.  The  discovery 
of  gold  in  California  in  1848  led  to  industrial  revival  and 
prosperity,  and  rising  prices  meant  an  unwelcomed  in- 
crease in  the  cost  of  living.  Immediate  "bread  and  butter 
benefits"  were  sought  and  the  structure  of  unionism  was 
adjusted  to  the  national  competitive  area.  In  1850  the 
Typographical  Union  perfected  a  national  organization; 
this  example  was  followed  by  the  Stone-Cutters  in  1853, 
the  Hat-Finishers  in  1854,  the  Moulders'  International 
Union  in  1857,  and  the  National  Union  of  Machinists  and 
Blacksmiths  in  1857.  Special  efforts  were  made  to  bring 
into  the  organizations  the  alien  workers  whose  competi- 
tion was  felt  keenly.  There  was  an  increasing  frequency 
in  strikes,  more  than  400  separate  strikes  having  taken 
place  in  1853-1854,  involving  almost  every  craft.  Follow- 
ing 1852  slavery  agitation  commanded  increasing  atten- 
tion. The  panic  of  1857  paralyzed  the  industrial  and 


344    Labor  Organizations — History  and  Types 

business  life  of  the  nation  and  in  its  wake  came  the  usual 
serious  consequences  to  the  workers — unemployment, 
wage  reductions,  loss  of  union  membership  and  financial 
reserves,  and  widespread  disintegration  of  the  labor  move- 
ment. As  in  the  panic  of  1837,  the  craft  unions  that 
survived  the  impact  of  depression  were  incapable  of  as- 
suming aggressive  policies. 

Revival  of  Trade  Unionism,  1857-1866.— Neither  indus- 
try nor  trade  unionism  had  recovered  from  the  disastrous 
effects  of  the  panic  of  1857  when  the  North  and  the  South 
entered  the  Civil  War.  The  immediate  effect  of  the  con- 
flict was  to  stimulate  the  demand  for  war  supplies,  iron, 
steel,  and  all  kinds  of  manufactured  goods.  Prices  ad- 
vanced, prosperity  returned,  and  industrial  expansion  was 
rapid.  The  man-power  of  the  nation  was  shifted  rapidly 
from  productive  industries  into  the  ranks  of  Union  and 
Confederate  forces.  The  demand  for  labor  was  unpre- 
cedented, and  there  followed  as  a  general  consequence 
increased  employment  of  women,  children,  immigrants, 
and  convicts.  Wages  rose,  but  not  so  fast  as  prices,  so 
that  the  workers  were  relatively  no  better  off.  Manu- 
facturers resorted  to  machine  methods  as  a  substitute  for 
manual  labor.  In  the  midst  of  these  trying  circumstances 
the  labor  movement  was  revived.  Local  unions  were 
established  and  these  were  integrated  into  national  organ- 
izations. No  less  than  ten  national  unions  came  into 
existence  between  1863  and  1866.  Thirty  city  trade-as- 
semblies sprang  up  before  1865,  to  promote  boycotts  and 
strikes.  In  1864  the  first  National  Industrial  Assembly 
of  North  America  dealt  with  primary  boycotts,  strikes, 
the  truck  system,  cooperation,  prison  labor,  competition, 
and  women  in  industry. 

By  the  end  of  the  sixties,  at  least  thirty-two  national 
trade  unions  were  in  existence,  the  local  unions  of  Canada 
becoming  an  integral  part  of  the  international  organiza- 
tions. Among  the  prominent  organizations  were  the  Na- 
tional Union  of  Cigarmakers,  the  Carpenters'  and  Joiners' 
International  Union,  the  Bricklayers'  and  Masons'  Inter- 
national Union,  and  the  Brotherhood  of  the  Footboard— 


Labor  Organizations — History  and  Types    345 

the  forerunner  of  the  Brotherhood  of  Locomotive  En- 
gineers. The  aims  of  organized  labor  were  practical,  the 
emphasis  being  placed  upon  higher  wages,  shorter  hours, 
and  freedom  of  organization  and  collective  action.  Strikes 
were  numerous  and  successful.  In  spite  of  all,  money 
wages  did  not  keep  pace  with  prices.  The  increasing 
introduction  of  machinery  and  labor-saving  devices  had 
an  unfavorable  effect  on  the  status  of  the  workers  at  the 
close  of  the  period.  Employers  were  more  united  than 
ever.  Machinery  was  destroying  trade  exclusiveness  and 
this  weakened  the  position  of  the  skilled  workers.  To 
cope  with  the  ever-widening  markets  integration  in  busi- 
ness organization  was  necessary,  and  this  gave  increasing 
strength  to  the  employer  in  dealing  with  labor.  The  influx 
of  alien  labor  and  the  use  of  negro  workers,  which  made 
possible  the  successful  breaking  of  strikes,  tended  to 
widen  the  breach  between  organized  labor  and  organized 
capital.  It  was  natural  that  race  prejudice  should  in- 
crease under  such  conditions.  Demobilization  of  the 
armies  brought  in  its  train  the  complex  and  serious  prob- 
lems which  always  constitute  the  aftermath  of  war. 

Attempted  Amalgamation,  1866-1886. — The  high  cost  of 
living  resulting  from  the  inflation  of  currency  incident 
to  the  war  continued  to  menace  the  standard  of  life  of 
the  wage-earners  in  the  period  of  reconstruction.  Com- 
petition among  the  workers  was  increased  greatly  by  the 
continued  influx  of  immigrants  and  the  return  of  demobil- 
ized soldiers  to  industrial  life.  The  organization  of  the 
National  Labor  Union  of  Baltimore  in  18G6,  and  the  emer- 
gence of  the  Noble  Order  of  the  Knights  of  Labor  in 
1869  are  the  outstanding  developments  in  this  period.  At 
the  end  of  the  Civil  War  every  important  industrial  city 
had  its  trades'  assembly  representing  all  the  organized 
crafts.  In  these  industrial  centers  there  were  also  co- 
operative stores,  free  libraries  and  reading  rooms,  legis- 
lative lobbies,  and  a  labor  press.  The  thirty  odd  national 
unions  of  particular  trades  were  powerful  and  several  of 
them  had  their  own  trade  journals. 

The  time  seemed  opportune  for  a  revival  of  the  move* 


346     Labor  Organizations — History  and  Types 

ment  designed  to  consolidate  all  labor  forces  in  the  coun- 
try, which  had  been  attempted  in  the  second  quarter  of 
the  century.  An  " Industrial  Assembly  of  North  America" 
had  been  held  at  Louisville,  Kentucky,  in  1864,  and  in 
1866  the  National  Labor  Union  was  formed  at  Baltimore. 
For  six  years  (1866-1872)  the  National  Labor  Union  held 
annual  congresses.  In  1868  it  is  said  to  have  had  a  mem- 
bership of  640,000.  The  basis  of  this  national  organization 
was  the  city  assemblies  of  trade  unions.  Although  formed 
as  a  federation  by  trade  unionists,  all  labor  organizations 
were  represented  in  it.  At  first  the  national  union  con- 
cerned itself  with  practical  questions  of  wages,  hours, 
strikes,  and  arbitration.  Strikes  were  opposed,  except  as 
a  last  resort,  and  arbitration  was  favored.  Trade  unions 
were  urged  for  the  workers  in  given  crafts,  and  labor 
unions  for  those  having  no  trade.  The  program  became 
comprehensive  and  to  some  extent  idealistic,  including 
the  establishment  of  cooperative  workshops  and  stores, 
tenement  house  reform,  public  lands  for  actual  settlers, 
enforcement  of  the  apprenticeship  system,  workingmen's 
lyceums  and  reading  rooms,  and  aid  to  women  workers. 
In  the  hope  of  securing  capital  and  credit  for  its  numerous 
cooperative  workshops,  the  National  Labor  Union  joined 
with  the  farmers'  grange  organizations  in  demanding 
large  issues  of  paper  money  or  greenbacks,  such  as  were 
issued  in  the  Civil  War.  The  movement  was  opposed  to 
the  national  banking  system  and  the  marketing  of  convict- 
made  goods  in  competition  with  the  products  of  free  labor. 

The  union  soon  became  involved  in  politics  and  the 
promotion  of  numerous  political  and  social  reforms.  De- 
cline set  in  about  1869  and  in  1872  it  ceased  to  function. 
The  city  centrals  or  trades'  assemblies  upon  which  it  was 
founded  were  interested  in  local  politics  rather  than  na- 
tional reforms.  Organization  of  national  craft  unions 
might  have  proved  more  successful.  At  this  time  socialists 
were  endeavoring  to  secure  control  of  the  American  labor 
movement,  but  their  attempts  were  not  highly  successful. 

Once  again  the  workers  deserted  theoretical  panaceas 
and  turned  to  more  practical  measures.  The  Industrial 


Labor  Organizations — History  and  Types     347 

Brotherhood  was  formed  in  1873,  founded  on  the  platform 
of  straight  unionism  with  resort  to  politics  only  when 
industrial  methods  proved  ineffectual.  The  program 
included  monthly  payments  of  wages,  public  markets, 
cheap  transportation,  legal  regulation  of  apprenticeship, 
exclusion  of  the  Chinese,  restriction  of  monopolies,  legal- 
ization of  cooperative  enterprises,  reduction  of  the  cost 
of  living,  legal  protection  of  labor  organizations  against 
conspiracy  attacks,  and  the  establishment  of  a  federal 
bureau  of  statistics.  Organization  by  trade  was  contem- 
plated and  a  vigorous  campaign  for  membership  was  be- 
gun. This  movement  failed  chiefly  because  workers  were 
so  strongly  craft-conscious  that  they  were  not  friendly 
towards  unity  and  cooperation  with  men  outside  their 
own  trades,  especially  with  common  laborers. 

The  continued  high  cost  of  living,  introduction  of  ma- 
chinery, disregard  of  apprenticeship  regulations,  substitu- 
tion of  cheap  labor  for  skilled  journeymen,  increasing 
unemployment  among  skilled  workers,  and  reduction  of 
wages  stirred  particular  trade  organizations  to  rebellion. 
In  1867  the  Knights  of  St.  Crispin  was  organized  by 
the  shoemakers,  and  the  first  Grand  Lodge  was  held  in 
1868.  Six  hundred  chapters  were  chartered.  At  the 
height  of  its  power  this  order  had  about  40,000  members, 
by  far  the  largest  labor  organization  in  existence.  In 
form  it  was  a  secret  organization  with  an  elaborate  ritual. 
Although  primarily  a  rebellion  against  the  use  of  the 
machine,  the  program  of  this  organization  included 
the  use  of  the  strike  for  higher  wages  and  other  benefits. 
Cooperation,  however,  was  considered  the  best  substitute 
for  the  evils  of  the  present  wage  system.  The  decline 
of  this  organization  was  as  rapid  as  its  rise,  and  soon 
after  the  panic  of  1873  it  disappeared.  The  Daughters 
of  St.  Crispin  had  been  organized  in  1869,  as  an  auxiliary; 
association  among  women  shoemakers.  The  causes  con- 
tributing to  the  decline  of  the  Knights  of  St.  Crispin  in- 
cluded interference  in  politics,  treachery  of  leaders,  high- 
Kalaricd  officials,  and  the  monopolistic  practice  of  refusing 
to  teach  the  trade  to  others, 


348     Labor  Organizations — History  and  Types 

Industrial  consolidations  and  trusts  were  integrating 
business  organization  and  operation  to  such  an  extent  that 
craft-consciousness  and  exclusiveness  of  the  workers  in 
the  various  trades  were  jolted  severely,  and  the  movement 
to  form  a  general  labor  union  received  a  new  impetus. 
For  a  period  of  fifteen  or  twenty  years  this  movement 
was  crystallized  in  the  Noble  Order  of  the  Knights  of 
Labor  which  was  organized  by  Uriah  S.  Stevens,  a  Phila- 
delphia tailor,  in  1869.  Originally  a  local  union  of  only 
seven  garment  cutters  and  limited  to  tailors,  this  organ- 
ization became  increasingly  inclusive,  having  at  the  time 
of  its  first  general  assembly  in  1878  about  80,000  members, 
and  increasing  this  number  to  100,000  in  1885  and  to  more 
than  600,000  in  1886,  when  the  order  reached  the  zenith 
of  its  power  and  influence.  Although  it  began  as  a  secret 
order  with  an  elaborate  ritual,  the  order  soon  discarded 
these  practices  along  with  its  trade  exclusiveness  and 
sought  to  amalgamate  the  workers  into  one  centrally  ad- 
ministered organization.  The  aims,  structure,  and  govern- 
ment of  the  Knights  of  Labor  deserve  special  considera- 
tion. 

The  unity  of  all  workers,  skilled  and  unskilled,  was  the 
fundamental  idea  of  the  order.  Machine  processes  level 
the  workers  and  make  skilled  and  unskilled  inter- 
dependent. It  was  reasoned,  therefore,  that  the  most 
perfect  government  is  one  in  which  "an  injury  to  one  is 
the  concern  of  all."  This  official  motto  showed  that  it 
was  essentially  a  class  organization  attempting  to  ameliorate 
the  conditions  of  the  workers  en  masse.  Unity  of  interest 
necessitates  unity  of  policy,  control,  and  administration. 
These  fundamental  concepts  explain  the  highly  central- 
ized government  of  the  Knights  of  Labor.  The  General 
Assembly  had  full  and  final  jurisdiction  in  all  matters 
pertaining  to  the  local  and  district  assemblies.  The  execu- 
tive officers  of  the  national  organization  could  suspend 
local  officers  and  members,  revoke  charters,  and,  by  unan- 
imous consent,  terminate  strikes.  Autonomy  of  sub- 
ordinate organizations  was  thus  practically  eliminated. 
The  General  Assembly  was  a  delegate  body  representing 


Labor  Organizations — History  and  Types    349 

the  entire  membership  of  subsidiary  bodies.  Subordinate 
bodies  were  the  local,  district,  state,  and  national  as- 
semblies. Locals  were  sometimes  composed  of  workers 
in  one  trade  but  often  of  those  in  several  trades,  being 
known  under  the  latter  condition  as  mixed  assemblies. 
Some  locals  were  composed  entirely  of  women.  Although 
the  majority  of  members  were  to  be  wage-earners,  skilled 
and  unskilled,  no  person  over  sixteen  years  of  age  was 
excluded  except  lawyers,  bankers,  professional  gamblers, 
stock  brokers,  and  liquor  dealers.  Until  1881  physicians 
were  also  excluded.  Nationality,  sex,  creed,  and  color 
did  not  constitute  grounds  for  exclusion.  Locals  might 
be  attached  directly  to  the  General  Assembly,  but  usually 
they  were  an  integral  part  of  district,  state,  or  national 
trade  assemblies.  District  assemblies  were  composed  of 
representatives  of  the  locals  in  a  given  locality.  State 
assemblies  had  jurisdiction  over  trade  organizations 
within  the  state,  except  where  jurisdiction  was  already 
delegated  to  mixed  assemblies.  Trade  locals  were  often 
formed  to  make  the  national  assemblies. 

The  official  policy  of  the  Knights  of  Labor  was  origi- 
nally to  discourage  strikes  and  boycotts  and  to  rely  on 
political  action,  cooperation,  and  education,  and  through 
these  to  obtain  the  abolition  of  the  wage  system  and  to 
substitute  therefor  a  cooperative  commonwealth.  Strikes 
were  to  be  used  only  as  a  last  resort.  It  was  difficult 
for  locals  to  secure  funds  for  strike  purposes.  Later, 
however,  strikes  became  frequent  and  costly  and  numer- 
ous internal  dissensions  arose.  The  program  was  compre- 
hensive, including  producers'  cooperation,  consumers'  co- 
operation, arbitration  of  industrial  disputes,  the  eight-hour 
day,  a  progressive  tax  on  incomes,  a  graduated  tax  on 
inheritances,  establishment  of  a  bureau  of  labor  statistics, 
occupancy  as  the  only  title  to  land,  introduction  of  a 
postal  savings  bank  system,  government  ownership  of 
railways  and  telegraph  lines,  and  the  referendum.  This 
proved  too  complex  and  remote  for  the  practically-minded 
wage-earners  of  America,  and  the  Knights  of  Labor  was 
superseded  l>v  the  American  Federation  of  Labor  which 


350    Labor  Organizations — History  and  Types 

adopted  a  more  moderate  and  practical  program  and 
built  its  organization  on  greater  autonomy  of  local  unions. 
Since  1900  the  Knights  of  Labor  has  been  practically  an 
extinct  organization. 

The  failure  of  the  Knights  of  Labor  may  be  attributed 
to  several  causes.  (1)  The  order  became  involved  in 
numerous  strikes,  often  sympathetic  strikes,  and  costly 
cooperative  ventures,  the  failure  of  which  not  only  drained 
its  financial  resources  but  brought  it  into  more  or  less 
disrepute.  (2)  The  peculiar  type  of  organization,  com- 
prising national  trade  assemblies  and  mixed  labor  assem- 
blies, resulted  in  a  conflict  with  the  American  Federation 
Of  Labor.  The  structure  disregarded  the  important  truth 
that  all  wage-earners  do  not  have  identical  interests,  but 
rather  very  definite  group  interests.  (3)  The  polyglot 
composition  of  membership  made  success  highly  improb- 
able if  not  impossible.  This  membership  included  wage- 
earners,  employers,  professional  men,  and  farmers,  whose 
economic  and  political  interests  were  neither  identical  nor 
harmonious.  (4)  Political  activity  and  entanglements 
spelled  disaster  for  the  Knights,  as  they  had  for  earlier 
labor  organizations.  Endorsement  of  free  silver  in  1896, 
condemnation  of  currency  expansion  in  1898,  and  opposi- 
tion to  William  McKinley  as  the  "bitter  enemy  of  labor" 
in  1899,  proved  sources  of  internal  dissension  and  outside 
opposition.  (5)  Overcentralization  of  power  in  the  hands 
of  the  general  officers  created  jealousy  and  suspicion  in 
the  minds  of  the  leaders  and  the  rank  and  file  in  the 
constituent  locals  and  assemblies.  (6)  Idealism  was  a 
contributory  cause  of  the  decline  of  the  Knights  of  Labor, 
as  it  had  been  of  many  of  its  predecessors.  The  abolition 
of  the  wage  system  and  the  establishment  of  a  cooperative 
commonwealth  seemed  remote  and  rambling  vagaries  to  the 
practically-minded  trade  unionists.  The  wage-earners 
were  interested  primarily  in  immediate  improvement  of 
standards  of  wages,  hours,  and  conditions.  It  was  upon 
,this  more  practical  platform  that  the  successor  of  the 
Knights  of  Labor — the  American  Federation  of  Labor — 
began  to  build  its  promise  for  the  wage-earners. 


Labor  Organizations — History  and  Types     35 1 

The  Predominance  of  Federation  and  the  Rise  of  Indus- 
trial Unionism,  1886  to  the  Present. — The  reorganization 
and  predominance  of  the  American  Federation  of  Labor 
and  the  emergence  of  industrial  unionism,  which  has  been 
given  a  revolutionary  character  by  the  Industrial  Work- 
ers of  the  World,  are  the  outstanding  features  of  this 
period.  Following  the  panic  of  1873  American  entre- 
preneurs sought  further  relief  from  the  precarious  con- 
sequences of  unrestricted  competition.  Industrial  com* 
lunations  and  railway  pools  resulted  in  an  unprecedented 
integration  of  industries.  An  era  of  trusts  began.  Com- 
petition was  no  longer  viewed  as  the  life  but  the  death 
of  trade  by  promoters  of  industrial  consolidation.  The 
movement  was  accelerated  by  the  panic  of  1893.  Both 
panics  affected  adversely  the  trade  union  movement,  and 
the  consolidation  of  industrial  concerns  was  forcing  a 
change  in  the  structure  of  American  unionism. 

In  1881  there  was  organized  at  Pittsburgh  the  Federa- 
tion of  Organized  Trades  and  Labor  Unions  of  the  United 
States  and  Canada.  At  that  time  there  were  ninety-five 
organizations,  having  a  combined  membership  of  262,000, 
affiliated  with  this  federation.  Between  1881  and  1886  the 
permanency  of  this  organization  seemed  very  uncertain. 
In  1886  the  national  trade  unions,  fearing  domination  by 
the  Knights  of  Labor,  assumed  control  of  the  federation 
and  reorganized  it  under  its  present  name  of  the  American 
Federation  of  Labor.  The  immediate  task  which  the  new 
federation  took  up  was  the  promotion  of  vigorous  inde- 
pendent trade  unionism  based  upon  craft  autonomy  as 
opposed  to  the  idealistic,  centrally  controlled  unionism  of 
the  Knights  of  Labor.  With  the  exception  of  a  few  set- 
backs resulting  from  economic  depressions,  the  growth  oi 
the  federation  since  its  reorganization  has  been  fairly, 
steady.  In  1897  the  paid-up  membership  was  264,825. 
From  that  time  on  to  1904  the  membership  increased  very 
rapidly,  reaching  a  total  of  1,676,200  in  the  latter  year. 
Following  1904  there  was  a  decline,  the  membership  fluc- 
tuating between  1,484,872  and  1,586,585  until  1911,  when 
the  number  increased  to  1,761,835.  The  increase  continued 


352    Labor  Organizations — History  and  Types 

until  in  1914  the  membership  reached  a  total  of  2,020,673. 
A  temporary  decline  resulting  from  the  depression  was 
followed  during  the  succeeding  five  years  by  remarkable 
growth,  accounted  for  chiefly  by  the  prosperity  incident 
to  the  war  which  created  an  extraordinary  demand  for 
labor  and  resulted  in  inflation  of  prices.  In  1919  the 
membership  was  3,260,069  and  in  1920,  4,978,740.  The 
business  depression  and  unemployment  reduced  the  mem- 
bership to  3,906,528  in  1921. 

In  interpreting  the  federation's  statistics  of  membership 
it  must  be  remembered  that  national  and  international 
unions  are  required  to  pay  only  the  per  capita  tax  upon 
their  full  paid-up  membership,  so  that  members  involved 
in  strikes  and  lockouts  or  unemployed  during  the  fiscal 
year  are  not  included  in  membership  figures.  In  1921, 
for  example,  the  membership  of  eight  international  unions 
that  were  suspended  for  noncompliance  with  the  decisions 
of  the  convention  was  115,425;  this  would  bring  the  total 
membership  to  4,021,953.  The  total  membership  of  Ameri- 
can labor  organizations  in  1922  probably  exceeds  6,000,- 
000,  two-thirds  of  which  is  found  in  organizations  affiliated 
with  the  American  Federation  of  Labor.  The  prominent 
organizations  outside  the  A.  F.  of  L.  in  1922  include  the 
Amalgamated  Clothing  Workers  of  America  (1914),  the 
Amalgamated  Textile  Workers,  the  Industrial  Workers 
of  the  World  (1905),  and  several  of  the  railroad  brother- 
hoods— Locomotive  Engineers  (1863),  Railway  Conduc- 
tors (1868),  Locomotive  Firemen  and  Engineers  (1873), 
and  the  Brotherhood  of  Railway  Trainmen  (1883).  Efforts 
have  been  made  recently  to  affiliate  the  railroad  brother- 
hoods with  the  federation  but  this  has  not  yet  been  accom- 
plished. 

In  its  structure  the  American  Federation  of  Labor  is 
essentially  a  federation  of  unions.  "It  is  a  federation 
of  organizations,  each  of  which  has  its  own  government, 
determined  by  its  own  needs  and  requirements,  the  result 
of  the  experiences  of  the  members  of  the  organization. 
This  right  to  self-government  was  recognized  in  the  be- 
ginning and  has  been  reaffirmed  and  adhered  to  as  con- 


Labor  Organizations — History  and  Types    353 

sistently  as  possible.  The  federation  has  no  powers  ex- 
cept those  which  are  authorized  and  conceded  by  the 
organizations  which  compose  it.  These  powers  are 
enumerated  in  its  written  constitution  and  the  definite 
direction  of  conventions."0  In  1921  the  federation  com- 
prised 36,247  local  unions,  110  national  and  international 
unions,  973  city  central  unions,  941  local  trade  and  federal 
labor  unions,  5  departments,  783  local  department  coun- 
cils, and  49  state  federations,  including  the  District  of 
Columbia. 

Craft  autonomy  with  loose  federation  for  the  adminis- 
tration of  intercraft  union  affairs  is  the  basis  of  the  A.  F. 
of  L.  structure.  Organizations  desiring  affiliation  must 
consist  of  wage-earners,  although  the  interpretation  of 
the  term  wage-earners  is  broad  enough  to  include  certain 
salaried  groups  such  as  the  American  Federation  of 
Teachers.  The  organic  unit  of  the  federation  is  the  local 
union.  The  locals  in  a  given  trade  are  members  of  the 
national  or  international  union  of  that  trade  where  such 
exists.  In  the  absence  of  a  national  or  international  union 
a  local  may  be  organized  by  and  affiliated  directly  with 
the  American  Federation  of  Labor  itself,  in  which  case  it  is 
called  a  federal  trade  local.  These  locals  are  the  nursery 
for  national  unions.  A  local  union  may  cut  across  craft 
lines  and  assume  a  mixed  industrial  character  when  the 
number  of  workers  of  one  craft  is  insufficient  to  form  a 
distinct  trade  local,  in  which  case  the  local  is  known  as  a 
federal  labor  union.  The  national  or  international  union 
is  a  trade  or  industrial  organization  which  brings  under 
one  jurisdiction  the  local  unions  in  one  craft  or  industry 
in  the  United  States  and  Canada  and  sometimes  Mexico. 
The  national  or  international  unions  are  usually  the  most 
powerful  and  authoritative  units,  creating  their  own  locals; 
sanctioning  affiliation  of  locals  formed  independently  by 
the  A.  F.  of  L. ;  maintaining  organizers;  controlling 
charters,  suspension  and  discipline  of  locals ;  and  rendering 
financial  assistance  to  constituent  organizations.  These 
units  are  in  fact  the  independent  associations  of  which  the 

•  Samuel  Compere,  The  American  Labor  Movement,  p.  7. 


354    Labor  Organizations — History  and  Types 

A.  F.  of  L.  is  merely  a  loose  federation  or  alliance.  They 
may  be  trade  nationals  or  internationals,  such  as  the  Inter- 
national Typographical  Union;  or  industrial,  such  as  the 
United  Mine  Workers  of  America  and  the  International 
Union  of  Mill,  Mine,  and  Smelter  Workers. 

Isolated  craft  unions  are  relatively  weak  in  bargaining 
•with  a  group  of  employers  and  are  frequently  disrupted 
by  jurisdictional  disputes.  To  remove  these  difficulties  city 
central  labor  unions  or  local  federations  of  labor  are 
formed.  Mutual  protection,  and  promotion  of  the  cause 
of  organized  labor  politically  and  economically  in  the  local- 
ity are  the  chief  functions  of  these  bodies.  The  local  or 
district  department  councils  are  formed  within  various 
trades,  such  as  the  building,  printing,  and  metal  trades, 
as  delegate  bodies  to  determine  local  jurisdiction,  discipline 
locals  for  infraction  of  local  rules,  and  make  and  enforce 
joint  agreements.  The  departments  chartered  by  the  A. 
F.  of  L.  are  federations  of  allied  nationals  and  interna- 
tionals created  to  act  as  clearing  houses  for  difficulties 
arising  between  the  various  organizations.  Adjustment  of 
disputes,  settlements  of  jurisdictional  disagreements,  and 
the  establishment  of  federated  trade  locals  are  among  the 
functions  of  the  departments.  At  the  present  time  there 
are  five  departments  in  the  federation — metal  trades,  build- 
ing trades,  railway  employees,  mining,  and  union  label 
trades.  The  state  federations  are  organizations  of  the  A. 
F.  of  L.  union  bodies  in  a  given  state  composed  of  delegates 
from  locals,  city  centrals,  and  various  councils.  The  state 
federation  seeks  to  secure  legislation  favorable  to  labor,  to 
promote  the  purchase  of  union  label  goods  and  to  make 
effective  boycotts  and  other  measures  designed  to  benefit 
organized  labor. 

Crowning  the  structure  is  the  A.  F.  of  L.  itself,  func- 
tioning through  the  annual  convention,  a  delegate  body 
which  elects  annually  the  Executive  Council  consisting  of 
a  president,  eight  vice-presidents,  a  treasurer,  and  a  secre- 
tary. Numerous  special  committees  are  also  appointed  by 
the  convention.  The  executive  and  legislative  work  of  the 
federation  is  carried  on  by  the  Executive  Council.  At 


Labor  Organizations — History  and  Types    355 

the  annual  convention  each  national  and  international 
iunion  is  allowed  one  delegate  for  each  4,000  paid-up  mem- 
bers or  any  fraction  thereof.  One  delegate  each  is  allowed 
also  for  state  federations,  city  centrals,  federal  labor 
unions,  and  local  unions  having  no  national  or  interna- 
tional union.  Numerous  fraternal  bodies  are  also  repre- 
sented, most  of  which  are  allowed  one  delegate.  The  bulk 
of  the  voting  power  rests  with  the  national  and  inter- 
national unions  which  are,  consequently,  able  to  deter- 
mine and  control  the  policies  of  the  federation.  The 
number  of  unions  represented  at  the  1921  convention  was 
304.  Of  these  93  were  national  and  international  unions, 
which  had  309  out  of  the  521  delegates  and  38,080  out 
of  the  38,293  votes. 

The  general  object  of  the  A.  F.  of  L.  is  to  better  the 
conditions  of  the  wage-earners  in  all  fields  of  human 
activity.  "Economic  betterment  in  all  directions  comes 
first."  It  seeks  to  unite  the  workers  in  a  loose  federation 
of  their  independent  crafts  or  associations,  leaving  each 
trade  or  labor  unit  free  to  govern  itself  within  its  own 
borders.  According  to  the  constitution  it  seeks  to  federate 
all  national  and  international  trade  unions  for  mutual 
assistance;  to  promote  the  use  of  the  union  label;  to 
secure  legislation  in  the  interests  of  the  working  people; 
to  influence  public  opinion  by  peaceful  and  legal  methods 
in  favor  of  organized  labor ;  and  to  aid  and  encourage  the 
labor  press.7 

Revolutionary  industrial  unionism  in  America,  at  least 
in  its  organized  form,  had  its  inception  with  the  organ- 
ization of  the  Industrial  Workers  of  the  World  at  Chicago, 
in  1905.  Even  in  its  origin  the  I.  W.  W.  represented  a 
merger  of  radical  groups  such  as  the  Socialist  Labor 
Party,  the  American  Labor  Union,  and  the  Western 
Federation  of  Miners,  which  were  opposed  to  craft  union- 
ism and  sought  to  promote  organization  of  the  workers 
by  industries  with  the  hope  that  these  might  be  integrated 
eventually  into  one  big  union.  Destruction  of  the  present 
economic  and  political  order  is  the  ultimate  goal.  Revolu- 
tionary industrial  unionism  is  a  protest  against  the  con- 

1  Constitution  of  the  A.  F.  of  L.,  Article  II,  sections  4,  5. 


356     Labor  Organizations — History  and  Types 

servative  policies  and  purposes  of  the  American  Federa- 
tion of  Labor.  Originally,  the  Industrial  Workers  of  the 
World  sought  to  combine  industrial  mass  action  with 
political  action  through  cooperation  with  the  Socialist 
Party.  In  1908,  however,  a  split  occurred  in  the  organiza- 
tion which  resulted  in  the  formation  of  two  branches 
known  as  the  Chicago  I.  W.  W.  and  the  Detroit  I.  W.  W. 
The  organization  had  been  weakened  in  1907  by  the  with- 
drawal of  the  Western  Federation  of  Miners  which  later 
affiliated  with  the  American  Federation  of  Labor.  In 
1915  the  Detroit  branch  of  the  I.  W.  W.  became  known 
as  the  Workers'  International  Industrial  Union.  Briefly, 
the  essential  difference  between  the  two  branches  is  that 
the  Detroit  group  seeks  the  establishment  of  a  socialistic 
commonwealth  by  means  of  political  action  as  well  as 
industrial  action,  while  the  Chicago  group  finds  its  ul- 
timate ideal  in  a  free  industrial  association,  condemns 
political  action  and  collective  bargaining,  and  advocates 
direct  industrial  action  and  sabotage,  not  always  free 
from  violence.  The  following  discussion  of  the  I.  W.  W. 
refers  to  the  Chicago  branch,  or  syndicalistic  group. 

The  I.  W.  W.  in  America  is  syndicalistic.  Syndicalism 
proposes  the  abolition  of  the  political  state  and  the  recon- 
struction of  society  by  direct  industrial  action,  and  advo- 
cates the  general  strike  of  all  workers  simultaneously  to 
overthrow  the  present  capitalistic  order  and  substitute 
therefor  ownership  and  control  of  industry  by  the  work- 
ers. The  doctrine  of  the  class  struggle  is  taught  and 
direct  action  is  interpreted  to  include  the  general  strike, 
boycott,  union  label,  and  sabotage.  Sabotage  may  be 
peaceful,  consisting  of  soldiering  on  the  job  and  other 
"ca'  canny"  tactics;  or  it  may  be  violent,  including  such 
practices  as  misdirection  of  baggage  and  perishable  goods, 
and  disabling  of  machines.  Private  property  rights  and 
privileges  are  denounced.  The  political  state  is  viewed 
as  an  agency  of  suppression  and  coercion  and  an  industrial 
commonwealth  of  free  associations  of  workers  is  desired. 
French  Syndicalism,  Russian  Bolshevism,  American  Com- 
munism, English  Revolutionary  Industrial  Unionism,  and 


Labor  Organizations — History  and  Types     357 

American  I.  W.  W.-ism  have  similar  ideals  and  purposes. 
Syndicalistic  opposition  to  the  political  state  has  led  to 
its  condemnation  as  a  philosophy  of  ' '  quasi-anarchism. " 

Although  the  Industrial  Workers  of  the  World  is  a 
much  feared  organization  and  can  easily  make  the  head- 
lines of  metropolitan  and  less  important  journals,  it  is, 
as  a  matter  of  fact,  much  less  powerful  than  is  generally 
supposed.  Its  actual  membership  cannot  be  determined 
accurately.  The  paid-up  membership  just  before  the 
World  War  was  14..310  and  a  total  of  100,000  membership 
cards  were  held  at  that  time.  On  January  1,  1917,  the 
paid-up  membership  was  put  at  60,000  and  a  total  of 
300,000  cards  was  said  to  have  been  issued  since  1905.8 
In  reality  the  I.  W.  W.  is  not  an  effective  organization, 
although  its  philosophy  is  essentially  dangerous.  Its  mem- 
bership comprises  a  restless,  unstabilized  body  of  workers 
who  have  rebelled  against  the  present  economic  and 
political  order  and  who  in  their  antisocial  attitude  and 
practices  have  discarded  all  suggestions  for  opportunistic 
reforms.  Many  of  them  are  "floaters"  or  "migrants" 
unable  and  unwilling  to  support  financially  the  organiza- 
tion through  which  they  seek  to  revolutionize  society. 
Internal  dissensions,  financial  weakness,  jealousy,  public 
suppression  and  persecution,  lack  of  faith  in  strong 
leadership,  ultraindividualism,  a  lack  of  practicality, 
and  excessive  idealism  are  among  the  many  reasons 
why  the  Industrial  Workers  of  the  World  has  not 
gained  and  probably  will  not  assume  leadership  in  the 
American  labor  movement.  American  labor  is  still  pre- 
dominantly craft-conscious  and  not  class-conscious,  and 
is  more  sympathetic  towards  practical  and  immediate 
gains  than  towards  proposals  for  an  industrial  Utopia. 

Summary  of  Historical  Lessons. — The  brief  historical 
sketch  of  the  labor  movement  which  has  been  attempted 
in  the  preceding  pages  suggests  several  important  lessons. 

1.  Unionism  is  a  Product  of  Causation. — It  is  a  well- 
established  truth  that  labor  organizations  arc  the  result 
of  definite,  ascertainable  causes  which  operate  in  the 

•  Paul  Briwenden,  History  of  the  I.  W.  W.,  2nd  ed.,  p.  341. 


358    Labor  Organizations — History  and  Types 

economic  and  political  life  of  the  nation.  Associations  of 
workers  formed  for  the  primary  purpose  of  collective  action 
have  emerged  in  response  to  the  separation  of  employer 
and  employee  functions,  the  consequent  rise  of  industrial 
classes,  the  wage  system,  the  development  of  the  factory 
system,  increasing  integration  of  industry,  the  blind  selfish- 
ness of  unscrupulous  employers  who  have  exploited  the 
defenseless  individual  worker,  legal  and  political  discrimi- 
nation against  the  workers  in  favor  of  propertied  classes, 
widening  of  the  competitive  area,  and  the  introduction  of 
machinery.  Unionism,  then,  is  not  the  artificial  creation 
of  vicious  minds  but  the  natural  and  inevitable  product  of 
evolutionary  forces. 

2.  Union  Types  Are  Attempted  Adaptations  to  Indus- 
trial Environment. — In  its  structural  aspects  unionism  is 
an  attempt  to  correlate  the  workers'  organized  power  with 
the  changing  structure  of  industry.    Without  disregarding 
the  powerful  influence  which  the  subjective  forces  of  leader- 
ship have  exercised  over  the  organization  and  ideals  of 
unionism,  it  may  be  said  that  the  structure  of  unionism 
has    represented    a    continuous    adaptation    to    changing 
methods   of  production  and  distribution.     Thus  distinct 
structural  forms  have  been  evolved.     Between  1800  and 
1815  the  local  union  was  the  only  form  of  trade  union 
grouping.    Intercraft  relations  did  not  exist  either  within 
the  same  city  or  between  different  localities.  Trades '  union- 
ism arose  between  1827  and  1838   in  the  form  of  city 
federations  which  assumed  control  of  the  labor  movement. 
Between  1865  and  1888  the  national  federations  were 
formed  in  order  to  introduce  more  unity  into  the  labor 
movement.     Since  1897  the  national  trade  unions  have 
been  the  dominant  form  of  labor  organization.9     In  all 
these  attempts  labor  has  endeavored  to  coordinate  its 
power  with  increasing  concentration  of  power  in  the  hands 
of  organized  capital. 

3.  Opportunistic  and  Practical  Rather  Than  Utopian  and 

°Geo.  E.  Barnett,  "The  Dominance  of  the  National  Union  in 
American  Labor  Organization,"  Quarterly  Journal  of  Economics, 
VoL  27,  1913,  pp.  455-481. 


Labor  Organizations — History  and  Types     359 

Idealistic  Schemes  Have  Appealed  to  American  Wage- 
Earners. — The  American  wage-earner  has  been  interested 
primarily  in  immediate  advances  in  wages,  reductions  in 
hours  of  work,  and  improvements  in  conditions  of  em- 
ployment. His  philosophy  has  been  fundamentally  a 
bread-and-butter  philosophy.  Owenism,  Fourierism,  and 
other  idealistic  schemes  have  appealed  to  him  onljfl 
slightly. 

4.  Industrial  Rather  Than  Political  Action  Has  Been 
Favored. — Direct    political    action    has    often    destroyed 
American  trade  unions.    Industrial  action  comprising  the 
strike,  boycott,  and  other  methods  used  in  conjunction 
with  effective  legislative  lobbies  has  proved  more  benefi- 
cial than  direct  political  participation. 

5.  Unionism  Can  be  Successful  Only  as  it  Recognizes 
Differentiated  Trade  and  Industrial  Interests  Among  the 
Workers. — The  failure  of  such  organizations  as  the  Knights 
of  Labor  suggests  that:  (1)  The  interests  and  points  of 
view  of  all  wage-earners  are  not  harmonious  nor  identical ; 
(2)  centralization  of  authority  and  control  is  likely  to 
prove  less  successful  than  decentralized  administration 
within  each  trade  group;  and  (3)  the  interests  and  motives 
of  employers  and  of  employees  are  sufficiently  differentiated 
and  antagonistic  to  preclude  a  homogeneous  association  of 
wage-earners,  employers,  and  professional  groups. 

6.  Craft  Unionism  May  be  Replaced  to  a  Large  Extent 
by  Industrial  Unionism. — The  inability  of  differentiated 
craft  organizations  to  deal  successfully  with  the  modern 
giant  corporation  and  trust  is  tending  to  stimulate  the 
growth  of  industrial  unions.     The  destruction  of  trade 
unions  by  organized  capital  tends  to  accelerate  this  move- 
ment. 

The  International  Growth  of  Unionism. — Trade  union- 
ism has  become  a  world  movement  of  extraordinary 
numerical  strength  and  is  assuming  great  industrial  and 
political  power.  Trade  unions  in  the  United  States  at 
the  present  time  claim  about  6,000,000  members,  a  numer- 
ical strength  200  per  cent  greater  than  in  1903.  Basing 
their  estimates  on  the  typical  American  family  of  five, 


360    Labor  Organizations — History  and  Types 

trade  union  leaders  state  that  this  membership  represents 
about  thirty  millions  of  the  total  population.  In  1920 
the  trade  union  membership  of  Great  Britain  was  put  by 
the  International  Labor  Office  at  8,024,000,  which  repre- 
sents an  increase  of  331  per  cent  over  1889,  when  the 
total  was  only  1,860,913.  Between  60  and  70  per  cent 
of  the  adult  male  wage-earners  were  organized  in  1920 
as  compared  with  only  20  per  cent  in  1889.  In  the  period 
1914-1920,  the  membership  of  British  trade  unions  in- 
creased more  than  100  per  cent.  The  membership  of  the 
German  trade  unions  increased  from  4,513,000  in  1913,  to 
11,900,000  in  1919,  and  13,000,000  in  1920,  or  more  than 
210  per  cent  for  the  period  1914-1920.  In  the  period 
1910-1920,  trade  union  membership  in  France  increased 
from  977,000  to  2,500,000  or  about  156  per  cent.  In  the 
last  decade  the  growth  of  unionism  has  been  extraordinary 
in  practically  every  country.  Japan  and  China  have  begun 
to  develop  promising  movements.  Agricultural  laborers 
also  are  organizing ;  over  two  millions  of  them  We're  repre- 
sented at  the  International  Congress  of  Farm  Workers 
which  met  in  Amsterdam  in  1920.  Statistics  on  the  growth 
of  unionism  issued  by  the  International  Labor  Office  of 
the  League  of  Nations  are  as  follows : 10 

Year  Membership 

1910  10,835,000 

1911  12,249,000 

1912  13,341,000 

1913  16,152,000 

1919  42,040,000 

1920  48,029,000 

Notwithstanding  this  remarkable  development  the  trade 
union  movement  has  only  begun  to  touch  the  fringe  of 
the  great  mass  of  workers,  especially  the  unskilled.  In 
the  United  States,  for  example,  there  are  about  30,000,000 
persons  in  the  status  of  employees,  not  less  than  16,000,000 
of  whom  could  probably  be  organized,  yet  not  more  than 
40  per  cent  are  organized,  and  these  are  mainly  skilled 
workers. 

10 Figures  for  the  years  1910-1912,  inclusive,  are  for  20  countries; 
those  for  1913,  1919,  and  1920  are  for  30  countrip« 


Labor  Organizations — History  and  Types    361 

Women  and  Trade  Unionism. — Women  have  been  slow 
to  organize  for  their  industrial  protection.  This  tardy 
development  of  unionism  among  women  workers  may  be 
accounted  for  by  many  factors,  chief  among  which  are : 
(1)  the  industrial  instability  of  women,  their  interest  in 
permanent  organization  being  dwarfed  by  the  prospect 
of  marriage;  (2)  the  rapid  spread  of  protective  laws 
designed  to  safeguard  the  conditions  under  which  women 
work;  and  (3)  discrimination  against  women  on  the  part 
of  organized  male  workers.  Men  fear  the  competition  of 
female  labor  and,  with  few  exceptions,  organizations  of 
male  workers  have  excluded  women.  In  recent  years 
there  has  been  a  quickening  of  women's  industrial  con- 
sciousness and  they  are  seeking  relief  in  unionism.  In 
Great  Britain,  trade  union  membership  among  employed 
females  increased  from  472,000  in  1914  to  1,224,000  in 
1918,  or  159  per  cent,  but  as  yet  less  than  30  per  cent  of 
the  adult  women  workers  are  organized.  As  an  induce- 
ment to  membership  the  British  National  Federation  of 
Women  Workers  gives  a  marriage  dowry  of  50  per  cent 
of  a  member's  contributions  when  she  leaves  the  trade 
or  terminates  membership,  provided  two  years'  membership 
has  been  maintained  and  no  out-of-work  or  sick  benefits 
have  been  received  during  the  period  of  membership. 
Many  of  the  unions  affiliated  with  the  American  Federa- 
tion of  Labor  admit  women  workers,  but  women  have 
not  yet  assumed  a  prominent  position  in  the  federation 
or  its  constituent  unions.  Since  1903  trade  unionism 
among  women  in  the  United  States  has  been  promoted 
by  the  National  Women's  Trade  Union  League,  which 
cooperates  with  the  American  Federation  of  Labor.  In 
April,  1922,  the  league  had  a  membership  of  approximately 
600,000,  representing  108  occupations.  An  International 
Congress  of  Working  Women  was  held  in  Washington, 
District  of  Columbia,  in  1919,  and  a  second  Congress  in 
Geneva,  Switzerland  in  1921.  Out  of  these  congresses 
there  has  come  the  International  Federation  of  Working 
Women,  which  has  adopted  the  threefold  purpose  of  (1) 
promoting  trade  unionism  among  women;  (2)  developing 


362    Labor  Organizations — History  and  Types 

an  international  policy  with  regard  to  the  needs  of  women 
and  children  and  the  legislative  proposals  made  by  the 
International  Labor  Conference  of  the  League  of  Nations ; 
and  (3)  encouraging  the  appointment  of  women  workers 
to  organizations  affecting  their  welfare  and  progress. 
Conservative  trade  unionism  is  endorsed ;  religious  unions 
and  those  affiliated  with  the  Communist  Internationale 
are  excluded. 

SELECTED  REFERENCES 

ADAMS,  T.  S.,  AND  SUMNEB,  H.  L.,  Labor  Problems.  1905.  Chap. 

VII. 

BARNETT,  G.  E.,  The  Present  Position  of  American  Trade  Union- 
ism, Amer.  Econ.  Rev.,  Supplement,  12:44-96,  March,  1922. 
BEARD,  MARY,  A  Short  History  of  the  American  Labor  Movement, 

1920. 
BEST,  HARRY,  Extent  of  Organization  in  the  Women's  Garment 

Making  Industries  of  New  York,  Amer.  Econ.  Rev.,  9:776- 

792,  Dec.,  1919. 

BRISSENDEN,  P.  F.,  History  of  the  I.  W.  W.,  second  edition,  1920. 
BROOKS,  J.  G.,  American  Syndicalism :  the  I.  W.  W.,  1913. 
CARLTON,   F.    T.,   History   and   Problems    of    Organised   Labor, 

revised  edition,  1920,  Chaps.  I-V. 
COMMONS,  J.  R.,  AND  OTHERS,  History  of  Labor  in  the  United 

States,  1918. 

ELY,  R.  T.,  The  Labor  Movement  in  America,  1886,  Chap.  III. 
GROAT,  G.  G.,  An  Introduction  to  the  Study  of  Organized  Labor 

in  America,  1917. 
HOLLANDER,  R.  F.,  AND  BARNETT,  G.  E.,  Studies  in  American 

Trade  Unionism,  1906,  Chaps.  I  and  XII. 
HOXIE,  R.  F.,  Trade  Unionism  in  the  United  States,  1917,  Chaps. 

I-VI. 

MCNEILL,  G.  E.  (editor),  The  Labor  Movement,  1887,  Chap.  IV. 
MITCHELL,  JOHN,  Organized  Labor,  1903,  Chaps.  Ill,  IV  and 

VII-IX. 
PARKER,  C.  H.,  The  I.  W.  W.,  Atlantic  Monthly,  120:651-662, 

Nov.,  1917. 

POWDERLY,  T.  V.,  Thirty  Years  of  Labor,  1859  to  1889,  1890. 
UNITED    STATES    INDUSTRIAL    COMMISSION,    Reports,    17:1-422; 

19:793-833,  1901,  1902. 
WEBB,  SIDNEY,  AND  WEBB,  BEATRICE,  History  of  Trade  Unionism, 

1920. 
WRIGHT,  C.  D.,  The  Industrial  Evolution  of  the  United  States, 

1895,  Chaps.  XVII,  XIX  and  XX. 


CHAPTER  XVI 

LABOR    ORGANIZATIONS— GOVERNMENT,    AIMS,   AND 
PRACTICES 

Government. — In  the  development  of  union  structure 
and  government  two  prominent  tendencies  appear; 
namely,  (1)  increasing  interrelationship  and  integration, 
and  (2)  increasing  centralization  of  control  within  the 
craft  union.  The  original  unit  of  government  was  the 
local  union  which  enjoyed  complete  autonomy.  Until 
1827  there  was  very  little  communication  between  the 
different  trade  locals  in  a  given  community  and  the  vari- 
ous locals  of  the  same  trade  in  the  different  localities. 
Recognition  of  interdependence,  however,  gradually  led 
to  the  formation  of  alliances.  Thus  in  1827  the  city 
federation  of  trade  unions  emerged,  in  1850  the  national 
trade  union,  and  since  that  time  comprehensive  amalgama- 
tions and  federations.  A  logical  sequence  of  these  devel- 
opments was  the  increasingly  complex  government  of 
unionism. 

Since  the  closing  decade  of  the  nineteenth  century,  the 
dominant  factor  in  the  government  of  the  American  trade 
union  has  tyeen  the  national  organization.  It  should  not 
be  understood  that  the  local  is  no  longer  an  important 
unit  in  trade  union  government.  In  fact,  the  local  must 
ever  be  the  organic  cell  of  the  labor  movement.  Each 
local  has  its  own  government  which  functions  construc- 
tively in  collective  arrangements  with  employers,  pro- 
motes unionization,  and  often  enters  into  local  politics. 
It  has  the  usual  corps  of  officials,  and  in  addition  various 
committees  performing  specific  functions.  Delegates  are 
elected  to  the  city  central  or  federation.  Perhaps  the 
most  important  officer  is  the  business  agent,  or  walking 

363 


364          Government,  Aims,  and  Practices 

delegate,  who  negotiates  with  employers  concerning 
wages,  adjustment  of  grievances,  and  the  enforcement  of 
union  regulations.  This  office  calls  for  skillful  bargaining, 
intelligence,  and  diplomacy.  Business  agents  have  often 
been  accused  of  accepting  bribes  to  prevent  or  call  off 
strikes,  and  of  acting  in  collusion  with  certain  employers 
to  injure  competitors  by  ordering  strikes  in  the  latter 's 
establishments.  Officers  in  the  local  union  usually  serve 
one  year,  and  it  is  a  common  practice  to  pass  the  honors 
around.  The  government  of  the  local  is  extremely 
democratic. 

The  prestige  of  the  national  union  is  well  established 
in  American  trade  unionism,  and  its  authority  has  become 
so  extensive  that  it  limits  or  supersedes  the  power  of  trade 
locals,  city  centrals,  and  local  and  national  allied  trade 
councils.  The  officers  of  the  national  unions  really  con- 
stitute the  general  staff  of  the  American  labor  movement. 
National  unions  exercise  such  broad  powers  as  the  es- 
tablishment of  locals;  the  determination  of  membership 
conditions  and  privileges,  economic  policies,  regulations 
governing  negotiation  of  agreements  and  the  execution 
of  strike  orders ;  the  control  and  administration  of  general 
strike  and  insurance  funds;  the  publication  of  the  trade 
journal ;  and  the  dissemination  of  propaganda.  Such  im- 
portant functions  call  for  strong  leadership  and  effective 
control.  The  annual  convention  is  the  real  source  of 
authority.  This  is  a  congress  of  delegates  from  constit- 
uent local  trade  unions  and  constitutes  the  legislative 
body  for  the  organization.  It  is  here  that  general  policies 
are  outlined.  Local  or  district  unions  that  are  dissatisfied 
with  the  decisions  and  actions  of  national  officers  bring 
their  grievances  to  the  floor  of  the  convention,  and  the 
administration  and  antiadministration  factions  fight  for 
control.  The  convention  elects  the  president  and  the 
executive  committee,  appoints  special  committees,  and 
makes  recommendations.  Executive  and  judicial  func- 
tions are  delegated  to  the  president  and  the  executive 
committee  in  whose  hands  the  welfare  and  progress  of 
the  organization  rest  until  the  next  regular  convention. 


Government,  Aims,  and  Practices         365 

National  unions  in  the  United  States  have  shown  a  tend- 
ency to  retain  experienced  leadership  for  an  extended 
term  of  service.  Constituent  locals  guard  jealously  their 
position  by  providing  that  a  referendum  vote  shall  be 
taken  on  all  questions  of  exceptional  importance. 

The  Aims  and  Ideals  of  Organized  Labor. — The  aims 
and  ideals  of  the  American  labor  movement  may  be 
divided  roughly  into  two  groups;  namely,  (1)  those  which 
seek  a  complete  reorganization  of  political  and  industrial 
society,  assuming  that  capitalism  is  not  the  final  stage  in 
industrial  evolution;  and  (2)  those  which  accept  the 
present  political  and  industrial  order  and  seek  to  improve 
the  status  of  the  wage-earning  classes  by  promoting  an 
opportunistic  or  practical  program  of  reform.  The 
unions  affiliated  with  the  American  Federation  of  Labor 
represent  in  a  general  way  the  second  group,  while  such 
organizations  as  the  Amalgamated  Clothing  Workers  and 
the  Industrial  Workers  of  the  World  represent  the  first 
group,  although  the  Clothing  Workers  enter  into  collective 
agreements.  The  aims  of  conservative  unions  are  dis- 
cussed here. 

1.  Economic  Reforms. — Economic  reforms  sponsored  by 
unionism  include  the  abolition  of  all  involuntary  servi- 
tude, except  as  a  punishment  for  crime;  a  working-day 
of  not  more  than  eight  hours,  with  a  forty-four  or  a  forty- 
eight  hour  week;  release  from  employment  for  one  day 
in  seven;  abolition  of  the  sweatshop  system;  discontinu- 
ance of  the  contract  system  on  public  work ;  maintenance 
of  an  equitable  scale  of  wages ;  conciliation  and  voluntary 
arbitration  in  the  settlement  of  disputes;  negotiation  of 
trade  agreements ;  safe  and  sanitary  conditions  of  employ- 
ment; protection  of  apprenticeship  standards;  and  opposi- 
tion to  company  houses,  company  stores,  and  payment  in 
kind. 

2.  Political  Reforms. — Among  the  political  demands  of 
organized  labor  are  the  municipal  ownership  of  public 
utilities;  woman  suffrage  coequal  with  man  suffrage;  the 
initiative,  referendum,  and   recall;   the  election   of  the 
president  and  vice-president  of  the  United  States  by  direct 


366         Government,  Aims,  and  Practices 

vote  of  the  people  without  the  intervention  of  an  electoral 
college ;  restriction  of  the  powers  of  judges  to  nullify  laws 
and  to  set  them  aside  as  unconstitutional;  the  provision 
of  an  easier  method  of  amending  the  Constitution  of  the 
United  States;  democratization  of  all  political  institu- 
tions ;  and  the  abolition  of  the  state  constabulary. 

3.  Legal  Reforms. — The  principal  judicial  and  legislative 
improvements  sought  by  organized  labor  include  the  free 
administration  of  justice  and  equality  of  rich  and  poor 
before  the  courts;  restriction  of  the  power  of  the  courts 
to  issue  injunctions  in  labor  disputes;  liability  of  em- 
ployers for  injuries  and  loss  of  life  in  industry;  legal 
prohibition  of  child  labor  and  strict  enforcement  of  all 
child  labor  laws;  and  legal  protection  of  women  in  in- 
dustry. 

In  addition  to  the  foregoing  economic,  political,  and 
legal  measures,  there  are  certain  more  or  less  general 
social  reforms  which  trade  unions  have  endorsed,  such 
as  free  schools,  free  text-books,  and  compulsory  educa- 
tion; sanitary  inspection  of  factories,  workshops,  mines, 
and  homes;  adequate  playground  facilities;  a  public-bath 
system  in  all  cities  and  the  installation  of  bathroom  at- 
tachments in  all  houses  or  apartments  used  for  habitation ; 
extension  of  public  savings  banks;  a  public  system  of 
noncontributory  old-age  pensions;  elimination  of  specula- 
tion in  commodities,  stocks,  and  bonds ;  and  general  civic 
improvement. 

The  Practices  of  Unionism. — 1.  Benefit  Schemes. — Trade 
union  benefit  schemes  include:  (1)  friendly  benefits,  com- 
prising insurance  against  sickness,  disability  through 
accident,  old  age,  and  death;  and  (2)  "out-of-work" 
benefits,  consisting  of  unemployment  donations  and  strike 
benfits.  Friendly  benefit  schemes  are  usually  associated 
with  the  trade  unions  of  Great  Britain,  where  such  fea- 
tures have  been  in  operation  since  about  1700.  Many  of 
the  British  unions  spend  two  or  three  times  as  much 
on  friendly  benefits  as  upon  strikes  and  boycotts,  but 
some  of  the  most  highly  developed  unions,  such  as  the 
coal  miners  and  the  cotton  operatives  who  constitute  one- 


Governmenty  Aims,  and  Practices         36? 

fifth  of  the  trade  union  membership,  provide  very  little 
in  the  way  of  friendly  benefits  and  unemployment  relief.1 

Prominent  trade  unions  in  the  United  States  having 
comprehensive  benefit  features  are  the  International  Typo- 
graphical Union,  the  Cigarmakers*  International  Union, 
the  Order  of  Railway  Conductors,  and  the  Brotherhood 
of  Locomotive  Engineers.  The  International  Typograph- 
ical Union,  under  the  provisions  of  the  executive  defense 
fund  established  in  1891,  normally  pays  a  strike  benefit 
of  $5  per  week  to  single,  and  $7  per  week  to  married 
members  engaged  in  a  strike  ordered  according  to  the 
rules  of  the  union.  Beginning  with  May  1,  1921,  this 
organization  waged  an  extended  fight  for  the  forty-four 
hour  week,  and  for  almost  a  year  approximately  8,000 
journeymen  and  apprentices  were  on  the  strike  roll.  Up 
to  January,  1922,  the  financial  receipts  incident  to  the 
strike  exceeded  $6,327,000,  and  the  disbursements  $5,483,- 
000.  Members  of  the  union  who  were  at  work  paid  at 
first  an  assessment  of  10  per  cent  and  later  of  7  per  cent 
of  their  earnings  to  support  those  on  strike.  The  benefits 
paid  to  strikers  were  at  the  rate  of  $12  a  week  for  single 
men  and  $17  for  married  men,  and  in  addition  each  local 
union  was  allowed  special  assistance  of  $5  a  week  for 
each  man  on  the  strike  roll.  Many  locals  increased  the 
national  organization's  benefits  $5  to  $10  a  week,  accord- 
ing to  their  financial  status.  The  benefits  were  larger 
than  originally  planned. 

In  1882  the  International  Typographical  Union  adopted 
a  burial  benefit  plan  which  has  been  modified  frequently 
and  now  provides  a  mortuary  benefit  of  $75  for  a  con- 
tinuous membership  of  one  year  or  less,  and  increased 
according  to  length  of  membership  up  to  $500  for  a  con- 
tinuous membership  of  fifteen  years  or  over.  During  the 
first  seven  years  of  its  existence  this  fund  provided  over 
$2,000,000  in  benefits.  In  1907  a  pension  plan  was 
adopted,  and  at  the  present  time  a  pension  of  $6  a  week 
is  paid  to  (1)  members  not  less  than  sixty  years  of  age, 
who  have  been  in  good  standing  for  a  period  of  twenty 

*  Sidney  and  Beatrice  Webb,  Industrial  Democracy,  1920  ed.,  p.  171. 


368         Government,  Aims,  and  Practices 

years,  and  who  find  it  impossible  to  secure  sustaining 
employment;  and  (2)  members  who  are  totally  incapaci- 
tated for  work,  whose  membership  has  been  active  for 
twenty  years,  and  whose  application  for  admission  to  the 
Printers'  Home  has  been  disapproved.  Between  1908  and 
1919,  approximately  $3,000,000  was  paid  to  pensioners. 
In  addition  to  these  features  the  union,  in  1892,  erected 
the  Home  for  Union  Printers  at  Colorado  Springs, 
Colorado,  at  a  cost  of  $70,000,  and  extensions  since  that 
time  have  increased  the  value  of  the  investment  to  ap- 
proximately $2,000,000. 

The  Cigarmakers'  International  Union  pays  strike, 
sickness,  death,  and  unemployment  benefits  and  provides 
traveling  expenses  for  members  while  in  search  of  work. 
The  Order  of  Railway  Conductors  established  their  mutual 
insurance  system  in  1882,  providing  for  death  and  per- 
manent disability  allowances  and  the  use  of  the  Home 
for  Aged  and  Disabled  Railroad  Employees.  The  home 
is  supported  jointly  by  the  four  railroad  brotherhoods. 
The  organization  of  the  Brotherhood  of  Locomotive  En- 
gineers includes  the  Locomotive  Engineers'  Mutual  Life 
and  Accident  Insurance  Association,  which  is  a  separate 
body  of  elected  delegates.  The  engineers,  moreover,  are 
operating  a  successful  national  bank  in  Cleveland,  Ohio. 
In  the  fiscal  year  1920-1921  over  $5,214,000  was  paid  by 
national  unions  affiliated  with  the  American  Federation  of 
Labor  for  death,  sickness,  and  unemployment  benefits, 
and  traveling  expenses  while  in  search  o'f  employment. 
Statistics  of  benefits  paid  by  locals  are  not  available,  but 
they  would  doubtless  increase  the  total  immensely. 

In  most  American  unions  friendly  benefit  funds  have 
not  been  kept  separate  from  the  general  administrative 
and  defense  funds,  which  exposes  the  former  to  exhaus- 
tion on  account  of  prolonged  strikes,  but  furnishes  a 
powerful  financial  reserve  for  defensive  and  aggressive 
purposes.  Trade  union  benefits  have  generally  resulted 
in:  (1)  increasing  and  stabilizing  membership,  (2)  pro- 
moting conservative  policies,  (3)  centralizing  of  union 
control  in  the  hands  of  national  organizations,  and  (4) 


Government,  Aims,  and  Practices          369 

making  the  workers  independent  of  mutual  benefit 
schemes  provided  by  employers.  When,  as  in  Great 
Britain  and  Germany,  social  insurance  covering  sickness, 
unemployment,  and  old  age  is  introduced,  the  benefit  fea- 
tures of  American  trade  unions  will  probably  be  even 
less  important  than  they  are  to-day. 

2.  Restriction    of   Membership. — The    extent    to    which 
trade  unions  restrict  their  membership  is  difficult  to  de- 
termine.    There  are  certain  conditions  of  entrance,  in- 
cluding the  payment  of  initiation  fees,  agreement  to  pay 
regular  dues  and  assessments,  adherence  to  the  provisions 
of  the  constitution  and  by-laws,  and  a  willingness  to  re- 
main loyal  to  the  organization.    Skilled  trades  require  a 
certain  degree  of  trade  proficiency  and  some  organiza- 
tions, such  as  the  musicians'  union,  prescribe  an  entrance 
examination.     Most  frequently,  however,  the  completion 
of  an  apprenticeship  term  of  two  or  three  years  is  tho 
basic  test  of  admission  to  the  union.     The  monopolistic 
character  of  unionism  develops  from  its  attempt  to  con- 
trol the  supply,  and  consequently  the  price,  of  labor  in 
given   trades    and    occupations.      Unions   are    exclusive 
monopolies  when  they  keep  out  prospective  members  by, 
exorbitant  initiation  fees  and  other  barriers.    Sometimes, 
as  among  certain  local  unions  of  electricians,  an  initiation 
fee  of  $150  is  charged,  but  excessive  entrance  fees  are 
the  exception  rather  than  the  rule.    A  common  practice 
is  to  refuse  admission  to  new  members  when  old  ones 
are  out  of  employment.    Most  labor  organizations  may  bo 
characterized  as  "open  unions,"  that  is,  having  no  un- 
reasonable limitations  on  membership.     Sex,  race,  color, 
and  nationality  have  been  reasons  for  exclusion,  but  a 
broader  policy  is  now  being  introduced.    If  labor  organ- 
izations are  to  be  described  as  monopolies,  they  are  really 
very  inclusive  ones,  since  organizers  are  employed,  litera- 
ture disseminated,  public  meetings  held,  and  even  coercive 
methods  applied  to  bring  nonunion  workers  within  tho 
organization. 

3.  Limitation  of  Apprentices. — The  apprenticeship  sys- 
tem is  a  product  of  the  handicraft  stage,  when  the  master, 


370          Government,  Aims,  and  Practices 

journeyman,  and  apprentice  constituted  the  industrial 
unit,  and  skill  was  not  supplemented  by  machines.  The 
law  usually  required  a  seven-year  apprenticeship,  de- 
signed to  safeguard  entrance  to  the  trade,  thereby  im- 
proving the  product  and  protecting  skilled  artizans  from 
"illegal  men."  Machine  methods  introduced  by  the  In- 
dustrial Revolution  destroyed  much  of  the  monopoly  of 
craftsmanship.  The  apprenticeship  system  was  soon  taken 
over  by  trade  unions,  as  a  means  of  limiting  the  supply 
of  skilled  labor  and  maintaining  a  desirable  wage  scale. 
Except  for  certain  trades  and  professions  where,  in  the 
interest  of  public  welfare,  the  law  requires  training  and 
proficiency,  apprenticeship  regulations  are  now  generally 
prescribed  by  the  union.  The  restriction  of  apprentices 
is  general  and  in  some  cases  appears  to  be  extreme  and 
unfair,  resulting  in  something  approaching  an  exclusive 
monopoly.  The  ratio  of  apprentices  to  one  journeyman 
is  often  one  to  ten,  but  more  commonly,  one  to  five,  and 
the  term  of  apprenticeship  is  two  or  three  years. 

Trade  union  regulation  of  apprenticeship  is  not  always 
successful,  and  many  of  the  stronger  organizations  de- 
mand only  a  definite  standard  of  trade  proficiency  as  the 
condition  of  membership.  The  apprenticeship  system  is 
apparently  no  longer  indispensable  to  the  life  of  trade 
unionism.  As  the  Webbs  have  observed:  "So  far  from 
apprenticeship  regulations  forming  a  necessary  part  of 
trade  unionism,  a  positive  majority  of  the  trade  unionists 
now  belong  to  occupations  in  which  no  shadow  of  appren- 
ticeship has  ever  existed.  .  .  .  Undemocratic  in  its  scope, 
unscientific  in  its  financial  aspects,  the  apprenticeship 
system,  in  spite  of  all  the  practical  arguments  in  its 
favor,  is  not  likely  to  be  deliberately  revived  by  modern 
democracy."2  There  is  grave  danger,  howrever,  that 
minute  specialization  will  result  in  a  dearth  of  highly 
skilled  workmen. 

4.  Restriction  of  Output. — Unions  are  accused  of  limit- 
ing output  in  a  number  of  ways.  In  the  building  trades, 
for  instance,  some  painters'  unions  do  not  allow  the  use 

2  Industrial  Democracy,  1920  ed.,  pp.  476,  481. 


Government,  Aims,  and  Practices         371 

of  a  brush  wider  than  four  and  one-half  inches  for  oil 
paint,  although  for  certain  classes  of  work  a  wider  brush 
is  more  economical.  Plumbers'  unions  and  steamfi  tters ' 
unions  often  prohibit  the  use  of  bicycles,  motorcycles,  auto- 
mobiles, and  vehicles  of  all  sorts  during  working  hours.  In 
some  sections  of  the  country  these  unions  demand  that 
all  pipe  up  to  two  inches  shall  be  cut  and  threaded  on 
the  job.  Bricklayers'  unions  sometimes  require  that  bricks 
shall  not  be  laid  with  more  than  one  hand,  and  that  no 
other  instrument  but  the  trowel  shall  be  used  in  laying 
them.  Rules  are  often  enforced  concerning  the  division 
of  labor.  Carpenters'  helpers  and  machinists  helpers  are 
prohibited  from  using  tools  of  the  trade.  Brick  masons 
insist  on  washing  down  and  pointing  brickwork  when  la- 
borers could  do  it  more  economically.  Finally,  each  craft 
insists  that  tasks  rightfully  belonging  to  it  shall  not  be  per- 
formed by  members  of  other  crafts.  Members  guilty  of 
speeding  or  excessive  work  are  sometimes  subjected  to 
a  fine  of  $5  for  the  first  offense,  and  expelled  if  found 
guilty  of  a  second  offense.  For  these  practices  unionism 
is  condemned  as  putting  a  premium  on  laziness,  ineffi- 
ciency, and  dishonesty,  and  reducing  all  workers  to  a 
dead  level  of  mediocrity. 

Unionists  justify  limitation  of  output  on  three  grounds: 
(1)  experience,  (2)  "lump-of-work,"  and  (3)  humani- 
tarianism.  The  experience  argument  states  that  when- 
ever there  has  been  increased  efficiency  and  output  by  a 
few  workers  in  a  trade,  the  employer  has  invariably  pro- 
ceeded to  reduce  the  general  level  of  wages.  Under  the 
piece-rate  systera  an  increase  in  the  number  of  pieces 
per  worker  per  day  has  been  followed  by  a  reduction  in 
the  rate  per  piece ;  consequently,  organized  labor  favors 
the  time  wage  and  standardization  of  speed.  The  lump- 
of-work  argument  is  that  a  given  amount  of  work  is 
required  and  that  this  quantity  of  labor  will  be  performed 
regardless  of  the  expense  involved.  It  follows,  therefore, 
that  the  workers  can  consciously  increase  the  time  re- 
quirement by  withholding  maximum  effort,  thereby  pro- 
viding an  extended  period  of  employment.  The  humani- 


372          Government,  Aims,  and  Practices 

tarian,  or  "  hcalth-of -the-worker, "  argument  is  that  ex- 
cessive speed  and  pace-making  are  deleterious  to  the 
health  of  the  worker.  The  employer  thinks  in  terms  of 
output  per  unit  of  time,  and  is  little  concerned  that  speed- 
ing will  throw  the  workers  upon  the  scrap  heap  to  be 
supported  by  charity.  The  worker  thinks  in  terms  of 
life  output;  the  longer  he  lives  the  greater  will  be  the 
total  product  of  his  labor.  To  a  very  large  degree  sea- 
sonal and  recurrent  periods  of  unemployment  are  respon- 
sible factors  in  limitation  of  output  by  the  workers. 
Moreover,  production  is  restricted  by  corporations  and 
other  producers.  In  the  building  trades,  for  example, 
contractors,  builders,  and  supply  dealers  have  restricted 
production  by  maintaining  high  prices,  collusion  in  bid- 
ding, unfair  practices,  and  agreements  with  labor.  Modern 
monopolies  limit  or  destroy  supplies  of  commodities  to 
maintain  prices  and  swell  profits.  Every  year  wholesale 
destruction  of  fruits  and  vegetables  is  resorted  to  for  the 
purpose  of  creating  a  scarcity  price. 

5.  Hostility  to  Machinery. — Trade  unions  are  often 
charged  with  restricting  the  use  of  machinery  and  pro- 
hibiting the  use  of  the  best  and  most  efficient  machines. 
Labor-saving  devices  have  frequently  been  looked  upon 
by  the  workers  as  monstrous  intrusions  upon  their  skill, 
and  a  cause  of  unemployment  and  low  wages.  Wholesale 
destruction  of  new  machines  was  a  common  practice  in 
the  early  years  of  machine  industry.  In  more  recent  times 
cigarmakers'  unions  have  refused  admission  of  machine 
workers;  coopers  have  opposed  the  manufacture  of  casks 
and  barrels  by  machines ;  plate  printers  for  years  insisted 
on  keeping  hand  presses  in  the  United  States  Bureau  of 
Engraving  and  Printing ;  and  numerous  other  crafts  have 
been  guilty  of  similar  restrictions.  The  workers  have 
gradually  learned  that  the  introduction  of  machinery  may 
increase,  rather  than  diminish,  the  demand  for  labor ;  con- 
sequently a  policy  of  regulation  is  being  substituted  for 
restriction.  The  new  policy  is  to  demand  that  only  union 
men  shall  operate  the  machines,  and  that  the  machine 


Government,  Aims,  and  Practices         873 

scale  of  wages  shall  be  as  high,  if  not  higher,  than  that 
paid  for  hand  work.  This  policy  has  been  carried  out 
with  remarkable  success  by  the  International  Typograph- 
ical Union  in  the  case  of  the  linotype  machine. 

6.  The  CKeck-off  System. — In  order  to  make  the  union 
shop  effective,  labor  organizations  must  have  some  way 
of  ascertaining  the  loyalty  of  members.  This  is  done  in 
one  of  two  ways.  (1)  At  frequent  intervals  union  officials 
may  call  for  an  inspection  of  cards.  Workers  who  do 
not  hold  union  cards  and  members  who  are  not  paid  up 
are  expelled  from  the  shop,  pending  satisfactory  arrange- 
ments with  the  organization.  Although  this  is  the  general 
method  of  enforcing  union  rules,  it  is  difficult  to  ad- 
minister in  establishments  where  union  officials  have  to 
bring  pressure  to  bear  upon  the  employer  or  minor  execu- 
tives to  discharge  those  who  have  not  complied  with  the 
requirements.  (2)  The  check-off  system  may  be  intro- 
duced. Under  this  plan,  which  is  found  in  the  bituminous 
coal  mining  industry  and  window  glass  manufactories  in 
the  United  States,  union  dues,  special  assessments,  fees, 
and  fines  are  deducted  by  the  employer  from  the  pay 
check  of  union  members.  This  saves  the  union  time  and 
expense  and  makes  possible  an  accurate  checking  up  of 
membership.  Its  disadvantage  is  that  it  involves  de- 
pendence upon  the  employer.  The  secretary  of  each  local 
union  presents  to  the  paymaster  of  the  company  a  list 
of  the  dues  and  assessments  to  be  deducted  from  the 
earnings  of  each  member.  After  the  money  is  checked 
off  it  is  turned  over  to  the  secretary  of  the  local  union. 

The  check-off  system  gained  considerable  prominence 
as  a  result  of  an  injunction  issued  against  it  by  federal 
Judge  A.  B.  Anderson,  of  the  district  court  at  Indian- 
apolis, on  October  31,  1921.  The  check-off  was  evidently 
not  held  illegal,  but  the  charge  was  made  that  it  allowed 
a  conspiracy  between  the  union  miners  and  the  operators 
in  the  central  competitive  field — Illinois,  Indiana,  Ohio, 
and  western  Pennsylvania — and  the  closed  shop  operators 
and  union  miners  of  other  states,  whereby  money  is  col- 


374          Government,  Aims,  and  Practices 

lected  to  unionize  nonunion  competitive  fields,  as  West 
Virginia.  This  was  said  to  constitute  a  conspiracy  in 
restraint  of  trade  and  a  violation  of  the  Sherman  Anti- 
Trust  Act.  On  October  5,  1921,  a  circuit  judge  of  Frank- 
lin County,  Illinois,  contending  that  the  check-off  system 
had  existed  since  1897,  issued  an  injunction  restraining 
the  operators  from  violating  their  agreement  with  the 
miners  by  abolishing  the  check-off.  Judge  Anderson's 
order  was  suspended  until  November  16,  1921,  by  the 
United  States  Court  of  Appeals,  at  Chicago,  and  on  De- 
cember 15,  1921,  this  same  Court  ruled  that  Judge  Ander- 
son erred  when  he  enjoined  the  check-off  system,  and 
ordered  that  a  new  injunction  be  drafted  giving  to  the 
miners  the  right  to  fulfillment  of  existing  contracts  with 
operators  in  the  competitive  field.  The  Court  also  held 
that  the  miners'  union  should  be  restrained  in  its  attempt 
to  unionize  the  mines  of  West  Virginia  only  in  so  far  as 
their  acts  immediately  and  directly  interfered  with  the 
operation  of  the  mines.  Although  the  check-off  system 
is  favored  by  the  United  Mine  Workers  of  America  and 
by  many  operators,  it  is  not  indispensable  to  the  existence 
of  trade  unions. 

7.  The  Check-Weighman. — The  check-weighman  is  the 
product  of  the  time  when  coal  produced  by  miners  was 
weighed  by  a  company  employee  who  was  not  scrupulous 
in  giving  accurate  weight.  An  extended  struggle  was 
waged  by  the  miners  of  Great  Britain  for  the  right  to 
have  one  of  their  own  number  act  as  checkweigher.  The 
Mines  Regulation  Act  of  1860  empowered  the  miners  of 
each  pit  to  appoint  their  own  representative,  but  confined 
their  choice  to  persons  actually  employed  at  the  particular 
mine.  The  operators  evaded  this  law,  but  later  acts 
strengthened  the  right  of  the  men  to  have,  at  the  expense 
of  the  whole  mine,  a  checkweigher  with  power  to  keep 
accurate  and  independent  record  of  each  man's  work.  In 
the  United  States  the  employment  of  the  check-weighman  is 
provided  by  law  in  some  states,  but  this  is  not  true  of  all 
states  where  coal  is  mined.  The  salary  of  this  official  is 
paid  by  the  men  in  the  mine  where  he  is  employed,  and 


Government,  Aims,  and  Practices         375 

the  amount  is  agreed  upon  between  himself  and  the  work- 
ers who  pay  him.  Only  those  who  have  coal  weighed  are 
assessed  for  this  purpose. 

The  Open  Shop  Versus  the  Closed  Shop. — The  national 
campaign  by  employers'  associations  for  the  so-called 
open  shop  has  brought  into  bold  relief  an  old  struggle 
between  organized  labor  and  organized  capital.  Much  of 
the  controversy  is  confusing  on  account  of  the  loose  usage 
of  terms  by  the  disputants.  The  term  "open  shop,"  when 
used  properly,  refers  to  an  establishment  where  there  is 
no  discrimination  between  union  and  nonunion  workers, 
and  both  may  be  employed.  Sometimes  the  employer  is 
friendly  towards  the  union  but  refuses  to  make  an  agree- 
ment with  it  binding  himself  to  any  definite  policy,  or  he 
may  be  either  indifferent  or  neutral  on  the  subject  of 
unionism.  The  industrial  relationship  in  such  a  shop  is 
very  free  and  likely  to  be  unstable,  since  attempts  will 
be  made  to  unionize  the  shop.  Other  employers  make 
an  agreement,  or  have  a  mutual  understanding  with  the 
organized  workers  which  stipulates  that  both  union  and 
nonunion  men  may  be  employed. 

The  term  "closed  shop"  may  likewise  apply  to  various 
types  of  industrial  relationship.  The  varieties  of  the 
closed  shop  include:  (1)  the  antiunion  shop,  (2)  the  closed 
shop  with  the  open  union,  and  (3)  the  closed  shop  with 
the  closed  union.  The  "antiunion  shop"  is  one  in  which 
the  employer  is  frankly  opposed  to  the  organization  of 
his  workers  and  will  not  knowingly  employ  a  union  man. 
Indeed,  he  will  discharge  any  union  workman  whom  he 
finds  in  his  .establishment.  This  is  the  kind  of  shop  that 
the  "union  smashing"  employers'  associations  insist  on 
maintaining.  In  accepting  employment  in  such  an  es- 
tablishment the  worker  is  frequently  required  to  sign  an 
affidavit  stating  that  he  is  not  a  union  man  and  agreeing 
not  to  join  a  union  while  in  the  employ  of  the  company 
without  the  written  consent  of  the  employer.  To  prevent 
the  employment  of  union  workers,  employment  bureaus 
are  often  maintained.  For  all  practical  purposes  this  is 
a  "closed  shop,"  that  is,  closed  to  union  workers.  The 


376          Government,  Aims,  and  Practices 

"closed  shop  with  the  open  union"  is  an  establishment  in 
which  the  employer  is  free  to  engage  whomever  he  wishes, 
but  a  new  worker  is  required  to  join  the  union  immedi- 
ately. The  union  is  recognized  and  formal  collective 
agreements  are  made  between  the  employer  and  the  or- 
ganized workers.  This  is  really  a  "preferential  union 
shop,"  and  exists  where  the  employer,  fearing  union 
domination,  prefers  not  to  establish  a  complete  union  shop, 
and  the  workers,  fearing  nonunion  men,  will  not  accept 
the  open  shop.  In  employing  new  men  preference  is  given 
to  union  workers,  but  if  the  union  cannot  fill  the  vacancies 
other  workers  may  be  engaged.  In  case  the  nonunion 
worker  refuses  to  join  the  union,  the  organized  workers 
can  secure  his  removal  from  the  shop  as  soon  as  a  union 
man  of  equal  skill  is  available.  This  plan  exists  under 
the  protocols  in  the  clothing  industry  of  the  United  States. 
The  "closed  shop  with  the  closed  union"  is  an  establishment 
in  which  only  union  men  may  be  employed  and  where 
union  membership  is  difficult  to  secure.  New  employees 
are  furnished  upon  application  to  the  business  agent  of 
the  union,  and  in  case  a  worker  loses  good  standing  with 
the  organization  the  employer  agrees  to  discharge  him 
at  the  request  of  the  union.  Membership  in  a  closed  union 
is  difficult  to  obtain  on  account  of  exorbitant  initiation 
fees,  rigid  apprenticeship  regulations,  and  unreasonable 
entrance  examinations.  By  these  means  an  effective  labor 
monopoly  is  established. 

Since  the  open  or  neutral  shop  is  likely  to  be  unusual 
and  difficult  to  maintain,  the  controversy  between  em- 
ployers' associations  and  labor  organizations  in  the  United 
States  is  essentially  one  concerning  the  merits  of  the  union 
and  the  antiunion  shop.  Experience  indicates  that  the 
advocates  of  the  so-called  "open  shop,"  or  "American 
plan,"  do  not  desire  a  legitimate  open  or  neutral  shop, 
but  rather  the  destruction  of  unionism  and  the  establish- 
ment of  shops  closed  to  union  workers.  Generally  speak- 
ing, all  industrial  establishments  are  either  "union"  or 
"nonunion"  shops.  The  union  shop  is  one  in  which  the 


Government,  Aims,  and  Practices          377 

wages,  hours  of  labor,  and  conditions  of  work  are  deter- 
mined by  joint  agreement  between  the  employer  and  the 
trade  union.  The  nonunion  shop  is  one  in  which  there  is  no 
joint  agreement  and  the  labor  contract  is  determined 
arbitrarily  by  the  employer. 

Militant  employers'  associations  oppose  the  union  shop 
on  the  grounds  that:  (1)  It  deprives  nonunion  workers 
of  their  natural,  constitutional  right  to  sell  their  labor 
under  any  conditions  they  deem  acceptable;  (2)  it  takes 
from  the  employer  his  right  to  run  his  business  as  he  sees 
fit,  without  the  interference  of  outside  agencies;  (3)  it 
tends  to  reduce  all  workers  to  the  dead  level  of  mediocrity 
by  regulating  output  and  insisting  upon  uniformity  of 
wages,  without  regard  to  differences  in  workmanship  and 
efficiency;  and  (4)  it  results  in  monopoly  of  labor  and 
destroys  free  access  to  the  competitive  labor  market.  It 
is  contended,  moreover,  that  all  of  these  disadvantages 
and  a  great  many  more  are  removed  from  the  nonunion 
shop. 

In  answer  to  these  objections  trade  unionists  insist  that: 
(1)  The  union  shop  is  necessary  to  make  collective  bar- 
gaining effective  and  to  prevent  infraction  of  union  rules 
by  unscrupulous  employers;  (2)  the  interests  and  welfare 
of  the  organized  majority  should  not  be  jeopardized  by  a 
nonunion  minority,  which  is  ignorant  of  the  advantages 
of  collective  bargaining  and  has  refused  to  assume  a  just 
share  of  the  financial  burden  incident  to  securing  higher 
wages,  fewer  hours,  and  better  conditions  of  work ;  (3) 
the  right  of  the  employer  to  run  his  business  as  ho  sees 
fit  is  no  longer  an  absolute  right,  since  the  state,  through 
the  exercise  of  the  police  power,  has  limited  that  right 
by  such  social  measures  as  workmen's  compensation,  fac- 
tory inspection,  and  minimum  wage  laws;  (4)  in  standard- 
izing output  and  wages  trade  unions  merely  exercise  the 
same  business  privilege  that  every  employer  enjoys  in 
standardizing  the  quality  and  price  of  his  product,  and 
in  adjusting  the  supply  for  the  purpose  of  assuring  iol- 
yency  and  profits;  and  (5)  the  employers'  interest  in  the 


378          Government,  Aims,  and  Practices 

nonunion  workmen  and  in  the  welfare  of  the  public  is 
camouflage  and  effective  propaganda  for  the  antiunion 
shop. 

Social  considerations  must  ultimately  determine  the 
relative  merits  of  union  and  nonunion  shops.  The  open 
union  shop  is  in  no  sense  monopolistic,  since  every  effort 
is  made  to  induce  nonunion  workers  to  enter  the  union. 
Monopolies  limit  supply  in  order  to  maintain  or  increase 
price :  open  trade  unions  make  no  attempt  to  limit  supply, 
but  rather  strive  to  increase  the  number  of  organized 
workers  for  the  purpose  not  of  establishing  a  monopoly 
price  for  labor  but  of  securing  for  the  workers  a  full 
competitive  price.  Fair  competition  cannot  exist  between 
helpless  individual  workers  and  powerful  employers. 
Membership  in  an  open  union,  it  has  been  suggested,  is 
like  citizenship  in  a  democracy,  in  that  both  have  mini- 
mum requirements  of  admission  and  anyone  may  join 
who  meets  the  standards. 

Labor's  case  for  the  closed  shop  with  the  closed  union 
rests  on  no  such  justifiable  basis.  Impartial  judgment 
condemns  this  type  of  shop  as  autocratic,  economically 
unsound,  and  socially  indefensible.  It  functions  in  the 
interest  of  a  privileged  few ;  puts  a  premium  on  economic 
inefficiency;  and  discriminates  against  capable  workmen 
who  are  willing  to  assume  the  responsibilities  of  union 
membership,  but  are  kept  out  by  unreasonable  restrictions. 
Equal  condemnation  can  be  heaped  upon  the  antiunion 
shop.  The  use  of  the  spy  system  by  employers  to  keep 
out  union  workers  and  organizers  results  in  coercion  and 
intimidation,  which  destroy  the  spirit  of  liberty.  More- 
over, the  nonunion  shop  is  undemocratic  in  that  it  denies 
the  workers  an  independent  voice  in  the  control  of  indus- 
try and  often  forces  them  to  surrender  their  right  of 
union  membership.  The  closed  nonunion  shop  is  difficult 
to  detect,  because  employers  can  do  surreptitiously  what 
unionists,  on  account  of  their  numbers,  must  do  openly. 

Highly  skilled  trades  with  prolonged  periods  of  appren- 
ticeship do  not  find  it  necessary  to  demand  a  union  shop. 
Unions  of  unskilled  workers,  however,  especially  in  the 


Government,  Aims,  and  Practices          379 

United  States,  where  cheap  immigrant  and  negro  labor 
is  a  serious  competitive  factor,  find  in  the  union  shop  a 
necessary  defense  against  deterioration  of  the  wage  scale 
and  other  conditions  of  employment.  Under  such  circum- 
stances the  union  shop  should  be  established,  provided 
there  are  no  restrictions  on  admission  to  the  union.  If, 
on  the  other  hand,  the  union  shop  proves  economically 
inefficient  and  unfair,  it  can  hardly  receive  social  sanc- 
tion. 

Political  Action. — In  general,  the  political  policy  of  the 
American  labor  movement  consists  in  voting  for  members 
of  the  two  prevailing  political  parties,  according  as  these 
members  befriend  organized  labor  and  the  cause  of  the 
workers.  It  is  a  policy  of  rewarding  labor's  friends  and 
punishing  its  enemies.  Legislative  committees  are  main- 
tained to  watch  over  the  interests  of  labor  in  state  legis- 
latures and  the  federal  Congress.  An  effective  system 
of  lobbying  is  used.  Recently,  there  has  been  a  definite 
movement  for  direct  political  action.  On  November  17, 
1918,  the  Independent  La-bor  Party  of  Illinois  was  organ- 
ized at  a  meeting  of  the  Chicago  Federation  of  Labor. 
This  movement  was  endorsed  by  the  state  federation  and 
on  April  12,  1919,  a  state  convention  was  held  at  Spring- 
field, where  a  constitution  and  platform  were  drawn  up. 
In  1919  the  central  unions  of  Greater  New  York  and  tho 
state  federation  of  Pennsylvania  organized  labor  parties, 
and  within  a  short  time  not  less  than  forty  labor  parties 
were  organized  in  various  parts  of  the  country. 

On  November  24,  1919,  over  one  thousand  delegates 
representing  labor  and  farmers'  organizations  assembled 
in  Chicago  and  organized  the  Labor  Party  of  the  United 
States.  The  demands  of  the  various  local,  state,  and 
national  labor  parties  included  nationalization  of  all  pub- 
lic utilities,  basic  industries  and  unused  lands;  govern- 
ment ownership  of  the  banking  business;  abolition  of  the 
United  States  Senate  and  state  senates;  election  of  federal 
judges  by  direct  vote  of  the  people  for  terms  not  exceed- 
ing four  years;  abolition  of  profiteering;  the  eight-hour 
day  and  the  forty-four  hour  week;  minimum  wage  for 


380          Government,  Aims,  and  Practices 

workers  fixed  by  law;  old  age  pensions,  unemploy- 
ment and  sickness  insurance ;  taxes  on  incomes  and  in- 
heritances; national  initiative,  referendum,  and  recall; 
international  disarmament;  abolition  of  employment  for 
all  children  under  sixteen  years  of  age ;  the  right  of  labor 
to  organize  and  bargain  collectively;  and  freedom  of 
speech,  press,  and  assemblage.  Fearing  a  repetition  of 
the  disastrous  political  experiments  of  the  Knights  of 
Labor  and  earlier  organizations,  the  American  Federation 
of  Labor  maintained  its  traditional  policy  of  disapproving 
all  attempts  to  form  labor  parties.  Developments  in  1921- 
1922  indicate,  however,  that  the  workers  endorse  direct 
political  action  in  conjunction  with  the  liberal  forces  in 
the  various  states.  The  success  of  the  British  Labor  Party 
has  doubtless  had  an  important  influence  on  this  move- 
ment. 

Jurisdictional  Disputes. — Throughout  its  history  trade 
unionism  has  been  threatened  with  disruption  because  of 
disagreements  among  the  various  crafts  concerning  trade 
boundaries.  Frequent  and  costly  strikes,  injustice  and 
economic  loss  to  employers,  and  injury  to  the  prestige 
of  unionism  have  been  among  the  consequences  of  these 
controversies.  The  lines  of  division  between  trades  in  the 
complex  structure  of  modern  industry  are  often  imper- 
ceptible, and  with  increasing  specialization  and  subdivi- 
sion of  tasks  it  is  a  difficult  problem  for  trade  unions 
to  determine  where  the  jurisdiction  of  one  craft  begins 
and  another  ends.  Each  year  the  proceedings  of  the 
American  Federation  of  Labor  contain  numerous  cases 
of  Jurisdictional  quarrels,  and  union  officials  are  con- 
stantly perplexed. 

Jurisdictional  disputes  may  be  classified  as:  (1)  terri- 
torial or  geographical;  (2)  intertrade;  and  (3)  organiza- 
tion, which  is  further  divided  into  (a)  those  disputes  which 
arise  from  minute  specialization  of  tasks,  and  (&)  those 
developing  from  a  conflict  between  trade  unions  and  indus- 
trial unions.  Territorial  disputes  arise  when  two  or  more 
local  trade  unions  come  into  conflict  over  the  territorial 
limits  of  their  authority.  As  locals  are  absorbed  by  na- 


Government,  Aims,  and  Practices          381 

tionals  adjustments  are  made  by  the  latter.  Sometimes 
national  unions  in  the  same  or  allied  trades  may  disagree 
over  the  area  of  organization.  Intertrade  disputes  are 
by  far  the  most  general ;  they  develop  when  one  or  more 
trades  pass  the  "dead  line"  and  perform  tasks  which  are 
claimed  to  be  within  the  jurisdiction  of  another  craft. 
These  occur  most  frequently  in  the  building  trades,  where 
jurisdictional  quarrels  cause  one-quarter  of  the  total  num- 
ber of  strikes.  The  carpenters  object  to  plasterers  putting 
in  laths  because  this  involves  the  use  of  wood  and  the 
driving  of  nails ;  electricians  and  plumbers  who  bore  holes 
through  wood  for  the  laying  of  conduits  or  pipes  incur 
the  displeasure  of  the  carpenters'  union;  and  construction 
electricians  quarrel  with  maintenance  electricians  over 
jurisdiction. 

Organization  disputes  developing  from  subdivision  of 
labor  are  illustrated  by  the  printing  trade.  In  its  simple 
stage  one  tradesman  performed  all  the  work  incident  to 
printing,  but  in  its  more  complex  stage  the  trade  employs 
pressmen,  compositors,  book  binders,  proof  readers,  mail- 
ers, stereotypers,  electrotypers,  and  linotypers.  The  In- 
ternational Typographical  Union,  which  embraces  several 
classes  of  workers,  has  been  in  conflict  with  the  Inter- 
national Association  of  Machinists  concerning  jurisdiction 
over  linotype  machinists.  The  second  variety  of  organiza- 
tion quarrel  arises  where  industrial  unions  claim  juris- 
diction over  every  group  of  workers  in  an  industry,  in- 
cluding the  unskilled  and  auxiliary  trades,  such  as  the 
stationary  engineers  and  firemen,  and  teamsters  who  are 
found  in  many  occupations.  Industrial  unions,  such  as 
the  United  Brewery  Workers  and  United  Mine  Workers 
of  America,  are  frequently  in  dispute  with  trade  unions 
within  their  respective  industry. 

Several  solutions  for  jurisdietional  disputes  have  been 
attempted.  To  promote  strict  adherence  to  trade  lines, 
trade  unions  specify  in  their  constitutions  and  laws  what 
they  consider  to  be  the  exact  demarcations  of  the  trade. 
Tribunals  for  the  adjustment  of  jurisdictional  disputes 
have  been  organized.  The  executive  committee  of  the 


382         Government,  Aims,  and  Practices 

American  Federation  of  Labor  refuses  to  assume  respon- 
sibility for  the  settlement  of  these  grievances  but  en- 
courages the  formation  of  special  committees  and 
tribunals.  A  national  board  for  jurisdictional  awards  has 
been  created  in  the  building  trades.  Amalgamation  and 
industrial  unionism,  with  the  abolition  of  craft  unionism, 
has  been  proposed  as  an  effective  solution.  The  effective- 
ness of  amalgamation  is  doubtful,  but  industrial  unionism 
tends  to  destroy  craft-consciousness  and,  therefore,  to 
eliminate  craft  quarrels.  Ultimately,  the  solution  lies 
within  the  unions  themselves.  Mr.  Gompers  has  suggested 
that  the  elimination  of  craft  disputes  is  impossible  and 
that  the  essential  element  in  the  lessening  of  disputes  is 
the  development  of  a  spirit  of  fraternity. 

Labor  Organizations  and  Education. — One  of  the  most 
promising  and  constructive  of  modern  trade  union  tend- 
encies is  the  increasing  emphasis  that  is  placed  upon 
the  value  of  education.  Both  in  Europe  and  in  the  United 
States  trade  unions  are  urging  high  standards  of  public 
school  instruction  and  are  planning  advanced  education 
for  their  members.  The  British  labor  movement  is  in- 
terested actively  in  the  direction  of  Ruskin  College,  Ox- 
ford, which  promotes  broad  education  and  provides 
courses  of  study  for  residential  working-class  students 
as  well  as  courses  by  correspondence.  Other  British  insti- 
tutions doing  progressive  work  among  the  working  classes 
include :  The  London  School  of  Economics,  Central  Labor 
College,  and  the  Scottish  Labor  College. 

In  the  United  States  the  activities  of  trade  unions  for 
working-class  education  have  made  remarkable  progress 
during  the  last  few  years.  It  was  estimated  that  in  July, 
1921,  there  were  no  less  than  twenty-five  trade  union 
colleges  in  this  country.  The  general  purposes  of  these 
institutions  are:  (1)  to  give  the  workers  an  opportunity 
to  make  up  deficiencies  in  common  educational  branches, 
such  as  arithmetic,  English  grammar  and  literature,  and 
civics;  (2)  to  provide  advanced  courses  in  high  school 
and  college  subjects;  (3)  to  train  men  and  women  from 
the  ranks  of  labor  for  positions  of  immediate  leadership 


Government,  Aims,  and  Practices          383 

in  the  labor  movement;  and  (4)  to  educate  young  men 
and  women  in  the  labor  movement  for  administrative 
positions  which  are  expected  to  be  assumed  when  labor's 
hopes  for  complete  democratization  of  industry  are  real- 
ized. Many  of  the  institutions  are  night  schools,  but  in 
some  cities,  as  New  York,  Boston,  and  Chicago,  trade 
union  colleges  have  been  organized  and  are  offering 
courses  usually  found  in  college  curriculums.  Brookwood 
College,  the  first  resident  labor  college  in  the  United 
States,  has  been  established  at  Katonah,  New  York. 

Perhaps  the  most  extensive  work  along  educational 
lines  among  unionists  in  the  United  States  is  that  pro- 
moted by  the  International  Ladies'  Garment  Workers. 
This  union  appropriated  $5,000  for  educational  work  in 
1916,  but  the  amount  was  increased  to  $10,000  in  1918, 
and  the  1920  convention  at  Chicago  provided  for  an 
assessment  of  ten  cents  a  member,  which  makes  possible 
the  expenditure  of  $15,000  a  year  for  1921  and  1922. 
There  are  at  least  seven  public  schools  in  the  city  of  New 
York  where  the  members  of  this  organization  are  in- 
structed in  elementary  and  advanced  courses  in  English, 
economics,  and  hygiene.  Physical  culture  is  also  pro- 
vided. These  "unity  centers"  are  located  near  groups 
of  workers,  large  numbers  of  whom  are  foreign-born. 
Each  center  has  a  supervisor  appointed  by  the  department 
of  community  and  recreation  centers  of  the  board  of 
education,  and  at  least  forty  teachers  of  English  are  as- 
signed by  the  evening  school  department  of  the  city 
schools  to  give  instruction.  A  Workers'  University  is  also 
operated,  in  which  more  advanced  courses  are  offered. 
The  curriculum  for  1920-1921  included  trade  union  his- 
tory, policies,  and  problems;  current  economic  questions 
and  economic  geography;  logic,  literature,  sociology,  and 
applied  psychology ;  public  speaking ;  and  the  cooperative 
movement.  An  extension  department  is  maintained. 
Branches  of  the  unity  centers  and  the  Workers'  Univer- 
sity have  been  established  in  Cleveland  and  Philadelphia, 
while  in  Boston  arrangements  are  made  for  members  to 
take  advantage  of  the  Boston  Trade  Union  College.  Thou- 


384          Government,  Aims,  and  Practices 

sands  of  workers  have  availed  themselves  of  these"  oppor- 
tunities. 

Some  Recent  Tendencies. — Among  the  significant  tend- 
encies in  American  trade  unionism  are  the  activities  for 
the  promotion  of  industrial  unionism,  the  endorsement 
of  many  of  the  principal  aims  of  socialism,  the  demand 
for  nationalization  of  railroads  and  mines,  the  movement 
for  an  alliance  between  the  miners,  railroad  workers,  and 
longshoremen,  and  the  rebellion  of  the  rank  and  file  against 
the  conservative  policies  of  national  leaders.  Craft-con- 
sciousness is  being  discredited  and  the  solidarity  of  labor 
is  receiving  support.  Within  the  American  Federation 
of  Labor  there  is  a  definite  tendency  towards  industrial 
unionism,  expressed  through  such  organizations  as  the 
United  Mine  Workers  of  America,  which  in  1922  called 
the  first  joint  strike  of  anthracite  and  bituminous  miners, 
and  the  International  Union  of  Mine,  Mill,  and  Smelter 
Workers.  Under  the  influence  of  John  Fitzpatrick  and 
William  Z.  Foster,  the  Chicago  Federation  of  Labor  in 
1922  endorsed  a  plan  for  one  big  union  and  carried  its 
propaganda  for  industrial  unionism  and  the  one  big  union 
to  the  annual  convention  of  the  A.  F.  of  L.,  but  was  unsuc- 
cessful. This  action  was  denounced  vehemently  by  Mr. 
Gompers,  who  declared  the  one  big  union  idea  subversive  of 
Americanism.  The  rebellion  of  the  rank  and  file  has  been 
manifested  in  numerous  ' '  illegal "  or  ' '  outlaw ' '  strikes.  The 
Amalgamated  Clothing  Workers  of  America  and  several 
other  organizations  are  openly  sympathetic  with  the  so- 
cialist program. 

The  movement  for  nationalization  has  been  supported 
by  the  United  Mine  Workers  of  America  and  the  railroad 
workers,  with  the  endorsement  of  the  American  Federa- 
tion of  Labor.  The  plan  for  nationalization  of  the  rail- 
roads was  conceived  by  Mr.  Glen  E.  Plumb,  General 
Counsel  for  the  railroad  employees.  The  "Plumb  Plan" 
calls  for  government  ownership,  but  places  the  operation 
of  the  roads  in  the  hands  of  a  board  of  fifteen  directors, 
five  named  by  the  President  of  the  United  States  to  repre- 
sent the  public,  five  elected  by  the  operating  officers,  and 


Government,  Aims,  and  Practices         385 

five  by  the  classified  employees.  It  is  proposed  that  the 
government  issue  bonds  to  secure  funds  for  the  purchase 
of  the  railroads.  After  operating  expenses  are  paid,  and 
fixed  charges  are  met,  including  interest  on  outstanding 
government  securities,  the  surplus  is  to  be  divided  equally 
between  the  government  and  the  men.  The  dividend  to 
labor  is  to  be  divided  between  the  managerial  officials 
and  the  classified  employees,  the  former  receiving  double 
the  rate  that  goes  to  the  latter.  This  is  called  a  "dividend 
on  efficiency."  Replacements,  improvements,  and  exten- 
sions are  to  be  paid  by  the  government  out  of  its  share 
in  the  earnings. 

The  United  Mine  Workers  of  America,  in  its  1919  con- 
vention at  Cleveland,  Ohio,  passed  unanimously  a  resolu- 
tion demanding  immediate  nationalization  of  the  coal- 
mining industry  of  the  United  States  on  the  grounds 
that:  (1)  Coal  mining  is  a  basic  industry,  indispensable 
to  the  economic  life  of  the  nation ;  and  (2)  under  private 
ownership  and  operation  this  important  natural  resource 
is  being  wasted  profligately  without  regard  to  the  welfare 
of  future  generations.  The  proposed  plan  called  for  gov- 
ernment ownership  and  operation,  with  equal  represen- 
tation accorded  to  the  miners  on  all  administrative 
committees  and  councils. 

Incorporation  of  Labor  Organizations. — The  extraor- 
dinary numerical  growth  of  trade  unions,  coupled  with 
their  increasing  political  influence,  has  led  to  a  demand 
for  their  legal  responsibility.  Incorporation  is  urged  for 
the  following  reasons:  (1)  In  the  interest  of  social  welfare 
and  industrial  stability,  such  powerful  associations  should 
acquire  the  privilege  to  sue  and  the  liability  to  be  sued; 
(2)  the  assumption  of  legal  responsibility  by  trade  unions 
would  tend  to  promote  a  general  system  of  collective  bar- 
gaining, since  employers  would  have  redress  in  the  case 
of  abrogation  of  contracts,  and  unions  would  enjoy  the 
same  privilege;  (3)  if  trade  unions  were  made  legally, 
responsible,  their  policies  and  practices  would  tend  to 
become  more  conservative  and  constructive,  reducing  to 
a  minimum  emotional  and  spasmodic  actions;  and  (4)  it 


386          Government,  Aims,  and  Practices 

is  only  just  that  an  association  of  citizens  who  individually 
and  collectively  claim  constitutional  rights  and  legal  pro- 
tection should  assume  the  duty  of  amenability  to  the  laws 
of  the  states  and  the  United  States. 

Numerous  objections  are  raised  by  organized  labor 
against  incorporation.  It  is  contended  that  the  case  for 
incorporation  rests  upon  a  fundamental  assumption  that 
is  false;  namely,  the  irresponsibility  of  trade  unions  and 
their  tendency  to  violence.  Judicial  decisions  interpreting 
the  labor  clauses  of  the  Clayton  Act  indicate  unmistakably 
that  labor  organizations  in  the  United  States  are  legally 
responsible  for  wrongful  acts  committed  by  them  or  in 
their  name.  Moreover,  the  Danbury  Hatters'  case  shows 
that  trade  unions  can  be  sued  for  damages  in  the  event 
of  illegal  activities.  Litigation  of  this  sort  would  be 
brought  more  freely  by  employers  unsympathetic  with 
unionism,  if  incorporation  were  compulsory,  with  the  result 
that  trade  union  funds  would  soon  be  depleted.  Organ- 
ized workers  are  convinced  that  the  courts  are  prejudiced 
against  union  policies  and  methods,  and  that  judges  are 
obsessed  with  the  concept  of  the  sacredness  of  property 
rights.  Even  if  the  courts  were  impartial,  unions  could 
not  afford  to  employ  legal  advisers  comparable  in  training 
and  ability  with  those  in  the  employ  of  powerful  cor- 
porations. It  is  further  contended  that  trade  unions  are 
not  associations  organized  to  make  profit  through  the 
production  and  sale  of  commodities,  but  voluntary  associa- 
tions formed  for  the  purpose  of  bargaining  collectively 
in  the  sale  of  labor,  which  is  not  a  commodity.  Incorpora- 
tion seems  unnecessary  in  view  of  the  very  important  de- 
cision handed  down  in  June,  1922,  by  the  United  States 
Supreme  Court  in  the  Coronado  coal  case,  to  the  effect 
that  labor  organizations,  although  unincorporated  volun- 
tary associations,  may  be  prosecuted  for  violations  of  the 
Sherman  Anti-Trust  Act,  and  possess  the  power  to  sue 
and  be  sued.  Unwilling  incorporation  would  doubtless  lead 
to  surreptitious  evasion  of  the  law  by  employers  and  em- 
ployees who  would  mutually  agree  to  waive  the  privilege  of 
prosecution.  Voluntary  agreements  between  associations  of 


Government,  Aims,  and  Practices         387 

employers  and  unions  of  employees  providing  for  peaceful 
negotiations  will  produce  better  results  than  incorporation. 
Conclusions. — Unionism  is  a  product  of  industrial  con- 
ditions and  is,  therefore,  inevitable  and  necessary.  If  the 
lessons  of  history  teach  anything,  it  is  that  labor  organiza- 
tions cannot  be  crushed  and  that,  if  suppression  were 
possible,  it  would  not  be  desirable  either  industrially  or 
socially.  Unionism  is  indispensable  to  the  protection  of 
the  workers'  interests  against  the  selfish  and  unsocial 
attitude  and  practices  of  unscrupulous  employers.  Labor 
organizations,  however,  when  allowed  to  function  uncon- 
trolled by  society,  may  be  a  power  for  harm.  It  becomes 
necessary,  therefore,  for  society  to  legalize  the  peaceful 
functions  of  unionism  and  to  punish  violent  and  illegal 
activities.  Such  punishment,  however,  must  be  based  upon 
adequate  and  impartial  investigation  of  facts  and  not 
upon  the  perjured  evidence  and  testimony  of  antiunion 
forces. 

SELECTED  REFERENCES 

ADAMS,  T.  S.,  AND  SUMNER,  H.  L.,  Labor  Problems,  1905,  Chap. 

VII. 
AMERICAN  FEDERATION  OF  LABOR,  Report  of  the  Proceedings  of 

the  Annual  Convention. 
BKISSENDEN,  P.  F.,  History  of  the  I.  W.  W.,  second  edition,  1920, 

Chaps.  VIII,  IX  and  XIV. 
CARLTON,   F.   T.,   History   and  Problems   of  Organized  Labor, 

revised  edition,  1920,  Chap.  VI. 

COLE,  G.  D.  H.,  Recent  Developments  in  the  British  Labour  Move- 
ment, Aiper.  Ecpn.  Rev.,  8:486-504,  Sept.,  1918. 
COMMONS,  J.  R.  (editor),  Trade  Unionism  and  Labor  Problems, 

second  edition,  1921,  Chaps.  XXV-XXVII. 
ELY,  R.  T.,  Outlines  of  Economics,  1917,  Chap.  XXII. 
GOMPERS,  SAMUEL,  Labor  and  the  Employer,  1920,  Chaps.  IV, 

V,  VIII  and  IX. 
GROAT,  G.  G.,  An  Introduction  to  the  Study  of  Organized  Labor 

in  America,  1917,  Chaps.  IX,  XVI,  XVII,  XIX,  XX  and 

XXV. 
HOAGLAND,  H.  E.,  Closed  Shop  v.  Open  Shop,  Amer.  Econ.  Rev., 

8:750-762,  Deo.,  1918. 
HOLLANDER,  R.  F.,  AND  BARNETT,  G.  E.,  Studies  in  American 

Trade  Unionism,  1907. 


388         Government,  Aims,  and  Practices 

HOXIE,  R.  F.,  Trade  Unionism  in  the  United  States,  1917,  Chaps. 

VII,  X,  XI  and  XIV. 
MITCHELL,  JOHN,  Organized  Labor,  1903,  Chaps.  XII,  XIII,  XIX, 

XXIV,  XXVI,  XXVIII,  XXIX,  XXX  and  XXXI. 

SEAGER,  H.  R.,  Principles  of  Economics,  second  edition,  1917, 

Chap.  XXIX. 
STEWART,  ETHELBERT,  Standardization  of  Output  by  Agreement, 

Monthly  Labor  Review,  13:1,  2,  Aug.,  1921. 
TANNENBAUM,  FRANK,  The  Labor  Movement:  Its  Conservative 

Functions  and  Social  Consequences,  1921. 
TAUSSIG,  F.  W.,  Principles  of  Economics,  second  edition,  1917, 

Vol.  II,  Chap.  LV. 
UNITED  STATES  BUREAU  OP  LABOR  STATISTICS,  Monthly  Labor 

Review,  12:185-194,  June,  1921. 
UNITED  STATES  COMMISSION  ON  INDUSTRIAL  RELATIONS,  Final 

Report,  1916,  pp.  117-119. 
UNITED  STATES  INDUSTRIAL  COMMISSION,  Final  Report,  19:723- 

955,  1902. 
WEBB,  SIDNEY,  AND  WEBB,  BEATRICE,  Industrial  Democracy,  1920. 


CHAPTER  XVII 
EMPLOYERS'  ASSOCIATIONS 

Reasons  for  Existence. — The  discussion  of  labor  organ- 
izations in  the  preceding  chapters  suggests  that  one  of  the 
most  significant  developments  in  industrial  relations  dur- 
ing the  past  century  was  the  profound  consciousness  of 
group  interests  and  solidarity  among  the  wage-earners. 
This  consciousness,  which  was  the  product  of  industrial 
experiences,  found  objective  expression  in  organization 
and  collective  bargaining.  A  conception  of  common  in- 
terests grew  much  more  slowly  among  employers,  but 
such  a  development  was  inevitable  in  view  of  the  growing 
power  of  unionism.  The  rapid  growth  of  employers' 
associations  since  1885,  and  especially  during  the  last  two 
decades,  is  one  of  the  outstanding  features  of  the  labor 
movement  in  America.  Moreover,  similar  movements  have 
taken  place  in  other  advanced  industrial  countries.  These 
associations  are  formed  for  the  primary  purpose  of  deal- 
ing collectively  with,  or  resisting  organizations  of  em- 
ployees. 

Development. — The  employers'  association  is  not  a  new 
institution  in  our  industrial  system.  Indeed,  it  is  as  old 
as  the  trade  union  itself.  Like  the  latter,  the  early  asso- 
ciations of  employers  were  of  an  ephemeral  nature,  spring- 
ing into  existence  during  periods  of  pronounced  trade 
union  activity,  as  the  thirties  and  sixties,  and  subsiding 
when  this  activity  declined.  In  recent  decades,  however, 
employers'  associations  have  assumed  a  permanent  char- 
acter and  now  hold  a  position  in  the  American  labor 
movement  no  less  important  than  associations  of  em- 
ployees. Their  financial  power  is  far  greater  than  that 
possessed  by  organized  labor.  Great  improvements  in  the 
structure,  policies,  methods,  and  financial  status  of  these 

389 


390  Employers'  Associations 

organizations  have  made  them  effective  in  dealing  with 
unionism. 

The  collective  action  of  wage-earners  during  the  late 
eighteenth  and  early  nineteenth  centuries  was  met  by 
similar  action  by  employers.  Thus,  we  have  record  of 
the  ' '  Society  of  Master  Cordwainers  of  the  City  of  Phila- 
delphia" in  1789,  while  in  Boston  the  merchants  and 
shipowners  formed  associations  to  "discountenance  and 
check  the  unlawful  combination  formed  to  control  the 
freedom  of  individuals  as  to  the  hours  of  labor  and  to 
thwart  and  embarrass  those  by  whom  they  are  employed 
and  liberally  paid."  The  leather  dealers  and  the  employ- 
ing leather  dressers  of  New  York  City  formed  associations 
for  the  same  purposes  in  the  decade  of  the  thirties.  Like 
the  unions  of  employees,  these  early  associations  first 
emerged  in  the  larger  industrial  cities  where  competitive 
conditions  were  fairly  uniform  and  community  of  interests 
was  not  difficult  to  recognize.  The  early  trade  associa- 
tions of  employers  confined  their  efforts  largely  to  the 
promotion  of  social  and  educational  activities,  the  secur- 
ing of  legislation  designed  to  aid  their  particular  trades, 
and,  occasionally,  to  the  restriction  of  competition  and 
regulation  of  prices.1 

The  numerical  strength  of  employers'  organizations  was 
relatively  insignificant  until  the  period  of  business  revival 
and  industrial  expansion  following  the  Civil  War.  This 
is  accounted  for  by  the  fact  that  prior  to  the  reconstruc- 
tion period  the  labor  movement  consisted  chiefly  of  local 
organizations  more  or  less  unrelated  to  one  another.  As 
the  unions  gained  in  numerical  strength,  established  inter- 
relations, formulated  a  definite  and  aggressive  program 
and  harassed  employers,  the  latter  sought  protection  in 
unified  action,  and  formed  associations  to  offset  the  work 
of  the  unions.  Because  the  competitive  area  was  pre- 
dominantly local  it  was  natural  that  the  early  employers' 
associations,  like  the  early  trade  unions,  should  be  local. 
In  1864  the  iron  founders  of  Chicago  found  it  necessary 

1  Hollander  and  Barnett,  Studies  in  American  Trade  Unionism, 
p.  186. 


Employers'  Associations  391 

to  protect  their  interests  by  organizing  the  Iron  Found- 
ers' Association,  which  conceded  the  right  of  wage-earners 
to  organize  but  refused  to  admit  interference  by  labor 
organizations  in  the  administration  of  the  employer's 
business.  Similar  local  associations  were  established  in 
the  building  trades,  in  which  sympathetic  strikes  and 
union  jurisdictional  disputes  resulted  in  serious  injustice 
to  contractors. 

As  the  economic  competitive  area  widened  into  national 
scope  and  the  local  trade  unions  were  united  either  by 
a  process  of  amalgamation  or  by  federation  into  national 
organizations,  the  national  employers'  association  became 
a  reality.  In  1875  the  first  important  national  association, 
the  United  States  Potters'  Association,  was  created.  This 
was  followed  in  1886  by  the  Stove  Founders'  National 
Defense  Association,  which,  beginning  with  1891,  made 
formal  contracts  with  the  Iron  Moulders'  Union  of  North 
America  and  other  organizations  of  skilled  workers  in 
that  part  of  the  foundry  industry  concerned  with  the 
manufacture  of  stoves  and  furnaces.  The  achievements 
of  this  association  in  promoting  industrial  peace  by  col- 
lective labor  contracts  led  to  the  creation  in  1898  of  the 
more  comprehensive  association  of  employers  known  as 
the  National  Founders'  Association,  and  stimulated  the 
growth  of  other  national  associations.  In  the  fall  of  1899 
the  National  Metal  Trades  Association  came  into  exis- 
tence. By  1905  national  associations  had  appeared  in 
such  important  industries  as  the  stove  and  furnace  in- 
dustry, metal  foundry  work,  lake  transportation,  machine 
construction,  publishing  and  printing,  marble  cutting,  and 
the  manufacture  of  ready-made  clothing.2  The  Illinois 
Coal  Operators'  Association  was  organized  in  1897. 

Between  1895  and  1900  the  unions  in  the  building  trades 
were  federating  into  local  building-trades  councils,  and 
their  frequent  use  of  the  sympathetic  strike  paralyzed 
construction  in  cities;  in  Chicago  twenty-three  such 
strikes  occurred  during  the  erection  of  a  single  building. 

*W.  F.  Willoughby,  Quarterly  Journal  of  Economic*,  Vol.  209, 
p.  115. 


392  Employers'  Associations 

The  menace  of  the  sympathetic  strike  forced  the  employ- 
ers to  federate  their  local  asociations.  Thus  the  Chicago 
Building  Contractors'  Council  was  formed  out  of  fifteen 
associations  in  that  trade.  In  1903  the  New  York  City 
Building  Trades  Employers'  Association  was  organized. 
In  December  of  the  same  year  the  National  Building 
Trades  Employers'  Association  was  formed  in  Chicago  to 
parallel  the  federation  of  national  unions  known  as  the 
Structural  Building  Trades  Alliance.  Local  general  asso- 
ciations also  sprang  up,  such  as  the  Employers'  Associa- 
tion of  Dayton,  Ohio,  which  was  organized  in  June,  1900, 
and  the  Chicago  Employers'  Association,  created  in  Oc- 
tober, 1902 — large  federations  of  various  trades  and  busi- 
nesses. 

In  1895  the  National  Association  of  Manufacturers  was 
formed.  While  its  primary  purpose  is  the  promotion  of 
export  trade,  it  has  manifested  very  keen  interest  in  labor 
problems.  This  association  was  responsible  for  the  or- 
ganization of  the  Citizens'  Industrial  Association  of 
America,  in  1903,  the  definite  program  of  which  was 
to  oppose  organized  labor.  Local  "Citizens'  Alliances" 
sprang  up  in  the  same  year  in  Denver  and  elsewhere. 
These  comprised  employers  and  other  citizens  who  wished 
to  defeat  the  forces  of  organized  workers.  In  1902  the 
American  Anti-Boycott  Association  was  created  for  the 
purpose  of  attacking  labor  through  the  courts.  This  asso- 
ciation is  now  known  as  the  League  for  Industrial  Rights, 
and  is  an  efficient  ally  of  the  National  Association  of 
Manufacturers.  In  1907  the  latter  organization  formed 
the  National  Council  for  Industrial  Defense,  for  the  pur- 
pose of  fighting  labor  legislation  in  Congress  and  the  state 
legislatures.  State  associations  of  manufacturers,  such 
as  the  Illinois  Manufacturers'  Association,  have  been 
created,  which  not  only  promote  trade  interests  but  op- 
pose organized  labor  and  defeat  labor  legislation.  In 
Illinois,  for  example,  the  proposed  eight-hour  law  for 
women  and  the  legal  minimum  wage  have  been  defeated 
chiefly  through  the  effective  lobbying  of  the  state  manu- 
facturers '  association. 


Employers'  Associations  393 

During  the  last  decade  the  growth  of  employers'  asso- 
ciations has  been  phenomenal.  Ever  since  the  close  of  the 
Great  War  in  1918,  employers  have  made  an  unpre- 
cedented effort  to  marshal  their  forces  in  the  fight  against 
unionism  and  the  union  shop.  A  partial  survey  in  1920 
showed  540  employers'  associations  in  247  cities  scattered 
throughout  forty-four  states,  23  national  industrial  asso- 
ciations, 1,665  local  chambers  of  commerce,  and  the  Cham- 
ber of  Commerce  of  the  United  States,  all  of  which  had 
a  definite  labor  policy  and  for  the  most  part  sought  to 
promote  the  nonunion  shop  and  resist  the  demands  of 
organized  labor.  The  new  organizations  that  came  into 
existence  included  the  National  Industrial  Conference 
Board,  created  in  1916  for  the  purpose  of  collecting  in- 
formation and  giving  expression  to  the  voice  of  employers 
on  vital  problems  affecting  their  interests.  A  thorough 
survey  made  by  this  board  in  December,  1921,  brought 
returns  from  2,700  employers'  associations,  which  included 
national,  interstate,  state,  and  local  associations.  The 
survey,  when  completed,  was  expected  to  show  more  than 
3,000  associations  of  employers  in  the  United  States,  with 
a  total  membership  exceeding  4,000,000.  This  total  in- 
cludes many  persons  who  belong  to  several  associations 
and  are  counted  more  than  once. 

Types. — Employers'  associations  tend  to  become  co- 
extensive with  labor  organizations.  The  local  trade  unions 
are  paralleled  by  the  local  trade  employers'  association, 
the  city  central  or  city  federation  of  labor  by  the  general 
employers'  association,  the  state  federation  of  labor  by 
the  state  employers'  association  or  the  manufacturers' 
association,  the  national  and  international  trade  union  by 
the  national  and  international  employers'  association 
within  the  trade,  and  the  general  federation  of  labor  by 
the  national  association  of  manufacturers.  There  are  not 
only  local,  county,  state,  interstate,  and  national  associa- 
tions of  employers  within  a  given  trade,  but  geographic 
divisions  are  found  in  the  case  of  general  employers '  asso- 
ciations comprising  employers  from  various  trades,  and  in 
very  prominent  instances,  as  coal  mining,  where  industrial 


394  Employers9  Associations 

unions  are  organized  the  associations  of  employers  take 
an  industrial  form.  Parallel  organization  of  employers 
in  the  building  trades  is  illustrated  by  the  Chicago  Build- 
ing Construction  Employers'  Association,  the  Central 
Illinois  Building  Contractors'  Association,  the  Associated 
Building  Contractors'  Association  of  Illinois,  and  the  Na- 
tional Building  Trades  and  Employers'  Association. 
General  associations  are  illustrated  by  the  Chicago  Em- 
ployers' Association  and  the  Associated  Employers  of 
Indianapolis;  the  Manufacturers'  Association  of  Hartford 
County,  Connecticut;  the  Tri-City  Employers'  Association 
at  Cohoes,  New  York;  the  Illinois  Manufacturers'  Associa- 
tion ;  and  the  National  Association  of  Manufacturers.  The 
Illinois  Coal  Operators'  Association,  the  Southwestern 
Interstate  Coal  Operators'  Association,  and  similar  associa- 
tions in  other  competitive  fields,  are  attempts  to  make 
the  employers'  organizations  coextensive  with  the  United 
Mine  Workers  of  America. 

Classified  according  to  their  general  purposes,  employ- 
ers' associations  may  be  divided  into  two  groups:  (1) 
bargaining  associations,  or  those  which  are  organized 
primarily  to  deal  collectively  with  unions;  and  (2)  mili- 
tant associations,  or  those  which  are  created  to  oppose 
collective  bargaining  and  to  discredit  and  defeat  union- 
ism. The  first  group  represents  a  logical  complementary 
structure  to  unions  of  employees,  since  true  collective 
bargaining  can  take  place  only  when  both  employers  and 
workers  are  organized  into  associations  of  comparatively 
equal  strength,  and  peaceful  negotiation  is  the  normal 
method  of  settlement.  For  many  years  joint  agreements 
have  been  concluded  by  associations  of  employers,  and 
trade  unions  in  the  building  trades,  the  printing  trades, 
the  coal-mining  industry,  and  numerous  other  trades  and 
industries  in  the  United  States  and  other  countries.  Asso- 
ciations of  employers  in  many  of  these  trades  have 
adopted  the  permanent  policy  of  recognizing  the  right 
of  the  workers  to  organize  and  bargain  collectively  and 
of  cooperating  with  trade  unions  in  establishing  fair  wage 


Employers'  Associations  395 

scales,  reasonable  hours,  and  desirable  conditions  of  work. 
The  militant  employers'  association  is  a  comparatively 
recent  type  of  organization  in  the  American  labor  move- 
ment. Formed  originally  for  the  purpose  of  dealing  col- 
lectively with  powerful  trade  unions,  many  of  these  asso- 
ciations have  assumed  a  hostile  attitude  towards  unionism 
only  after  the  failure  of  joint  agreements.  This  was  true, 
for  example,  of  the  National  Metal  Trades  Association 
and  the  National  Founders'  Association,  both  of  which 
had  agreements  with  the  national  unions  in  their  respec- 
tive trades.  In  recent  years,  however,  an  increasing  num- 
ber of  these  associations  have  been  formed  with  the 
definite  purpose  of  crushing  unions.  All  attempts  to 
democratize  industry  through  trade  unionism  are  rejected. 
They  function  to  "  establish  and  maintain  liberty  of  con- 
tract" and  to  safeguard  the  employer's  absolute  right  to 
run  his  business  as  he  sees  fit.  The  Southern  Dental 
Trades  Association  "promotes  the  open  shop;  preserves 
equitable  conditions  in  shops  for  protection  of  employer 
and  employee ;  adjusts  certain  disputes  between  manage- 
ment and  men ;  and  refuses  any  interference  with  manage- 
ment by  labor  organizations."  Many  other  hostile  asso- 
ciations oppose  the  union  shop,  strikes,  and  trade  agree- 
ments, and  devote  their  efforts  to  procuring  "suitable 
employees"  for  members  through  free  employment 
offices.  This  type  of  association  frequently  announces 
that  it  has  no  objection  to  labor  organizations  as  such, 
but  opposes  them  whenever  they  show  signs  of  life  and 
aggression.  Prominent  among  the  associations  hostile  to 
organized  labor  are  the  Associated  Employers  of  Indian- 
apolis, the  National  Metal  Trades  Association,  the  Na- 
tional Founders'  Association,  the  Illinois  Manufacturers' 
Association  and  other  state  associations  of  this  kind,  the 
National  Council  for  Industrial  Peace,  the  League  for 
Industrial  Rights  (formerly  the  American  Anti-Boycott 
Association),  the  National  Association  of  Manufacturers, 
and  numerous  citizens'  alliances.  There  are  many  associa- 
tions of  employers  that  have  no  positive  functions  such 


396  Employers'  Associations 

as  collective  bargaining  nor  negative  functions*  sneh  as 
those  claimed  by  hostile  associations,  but  exist  merely  for 
incidental  activities  of  fellowship. 

Government,  Methods,  and  Policies. — Employers'  asso- 
ciations have  borrowed  largely  not  only  from  the  struc- 
ture of  labor  organizations  but  also  from  their  methods 
and  practices.  "Almost  every  important  feature  of  trade 
union  organization  finds  its  counterpart  in  the  employers' 
organizations.  Each  attempts  rigidly  to  control  the  action 
of  its  members  in  respect  to  the  inauguration  or  settle- 
ment of  trade  disputes.  Each  has  its  defense  fund,  and 
aids  financially  and  in  other  ways  the  member  involved 
in  a  dispute  resulting  in  a  cessation  of  work.  While  the 
trade  union  seeks  to  limit  the  opportunities  for  employ- 
ment to  a  body  of  men  professing  its  principles,  the  em- 
ployers' organization,  through  its  employment  and  regis- 
tration systems  and  the  giving  of  certificates  of  recom- 
mendation, attempts  to  secure  another  labor  force  that 
will  make  it  independent  of  such  union  labor.  Just  as 
the  unions  also  have  found  it  necessary  to  employ  salaried 
business  agents,  or  'walking  delegates'  ...  so  employers' 
organizations  have  their  commissioners  with  analogous 
functions. ' ' 3  The  strike,  the  boycott,  the  picket,  the  un- 
fair list,  and  the  union  shop  are  met  with  the  lockout,  the 
injunction,  the  blacklist,  the  employment  and  registration 
bureau,  and  the  open  shop. 

The  form  of  organization  is  not  unusual.  The  local 
trade  association  consists  of  employing  firms  in  the  trade, 
while  the  general  association  draws  its  membership  from 
miscellaneous  trade  associations  and  individual  firms. 
Administrative  authority  is  usually  vested  in  a  council 
consisting  of  the  major  association  officers  and  certain 
delegates.  The  executive  work  is  done  by  a  commissioner, 
business  agent  or  executive  secretary,  a  salaried  official, 
who  investigates  difficulties  and  sets  in  motion  the  ma- 
chinery of  adjustment  or  defense.  In  the  case  of  national 
trade  associations  the  country  is  divided  into  ten  or  more 

•Willoughby,  op.  cit.,  pp.  143,  144. 


Employers'  Associations  397 

districts  each  having  a  chairman,  vice-chairman  and  com- 
mittee. 

Employers'  associations  hold  inviolate  the  right  to  hire 
and  fire,  and  often  wage  uncompromising  war  upon  the 
union  shop.  It  is  claimed  that  the  employer  must  be 
free  to  employ  whom  he  will  at  wages  mutually  satisfac- 
tory, without  interference  on  the  part  of  individuals  or 
organizations  not  directly  parties  to  the  contract.  Labor 
unions  as  such  are  not  objectionable  even  to  the  militant 
employers'  association,  provided  there  is  no  insistence 
upon  the  right  of  collective  bargaining,  and  the  use  of 
the  unfair  list,  boycott,  strike,  and  other  "illegal 
methods."  There  is  to  be  tolerated  no  infringement  upon 
the  personal  liberty  either  of  employer  or  of  the  employee, 
no  restriction  of  output,  no  limitation  on  the  number  of 
apprentices,  and  no  interference  whatever  with  the  man- 
agement of  the  enterprise.  It  is  insisted  that  the  employer 
be  free  to  determine  the  number  of  apprentices,  helpers, 
and  handymen  for  his  establishment,  that  he  enjoy  the 
untrammeled  right  to  introduce  his  own  methods  of 
industrial  remuneration,  whether  time  wage,  piece  wage, 
premium  plan  or  contract  work.  Moreover,  employers 
must  be  free  to  introduce  whatever  new  machinery  and 
appliances  are  deemed  necessary  to  greater  efficiency. 
Provided  these  fundamental  principles  are  not  com- 
promised, there  is  a  willingness  on  the  part  of  employers' 
associations  generally  to  agree  to  arbitration  either  by  an 
impartial  outside  arbitrator  acting  alone  or  by  a  board 
of  joint  representatives  of  employers  and  employees  with 
an  impartial  chairman. 

To  make  their  associations  effective  employers  have 
found  it  necessary  to  accumulate  large  financial  reserves, 
to  adopt  systematic  tactics  of  defense  and  aggression,  and 
to  introduce  methods  of  discipline.  The  associations  re- 
quire an  initiation  fee  which  usually  ranges  from  $25  to 
$50,  and  annual  dues  and  assessments  for  emergencies 
which  vary  in  amount.  When  a  member  is  engaged  in  a 
fight  for  the  open  shop  or  the  defense  of  some  other  prin- 
ciple proclaimed  by  the  association,  financial  aid  is  given 


398  Employers'  Associations 

him  either  directly  or  indirectly.  Banks  are  often  induced 
to  refund  interest  on  loans  during  a  strike,  and  efforts 
are  made  to  persuade  owners  not  to  enforce  penalties  for 
failure  to  complete  building  structures  or  other  contract 
work  on  time.  Direct  compensation  is  given  in  the  form 
of  a  " strike  benefit"  paid  from  an  accumulated  reserve 
fund  set  aside  especially  for  fighting  organized  labor. 
Other  means  of  aiding  needy  members  consist  of  taking 
unfilled  orders  from  the  shop  which  is  on  strike,  having 
the  work  completed  in  the  establishments  of  other  mem- 
bers of  the  association,  and  sending  the  finished  products 
out  under  the  name  of  the  plant  that  is  having  trouble 
with  labor.  Under  such  circumstances  the  profits"  are 
refunded  to  the  owner  of  the  shop  in  which  the  strike 
is  occurring.  Employees  who  are  not  members  of  the 
union  and  not  on  strike  are  taken  from  the  shop  where 
no  strike  has  been  called,  and  placed  on  work  in  the 
establishment  where  there  is  trouble.  These  so-called  "in- 
dependent men"  are  engaged  on  a  yearly  contract  for 
just  such  a  purpose,  and  often  prove  effective  strike-break- 
ers. The  associations  often  solicit  special  orders  for  shops 
having  labor  trouble  in  order  to  assure  success  in  the 
fight  by  maintaining  output. 

To  assure  an  adequate  supply  of  nonunion  labor,  asso- 
ciations operate  their  own  employment  bureaus,  and  issue 
certificates  of  recommendation  to  "suitable  employees." 
There  is  no  objection  to  such  agencies  for  the  recruitment 
of  labor,  although  such  a  function  can  be  performed  best 
by  the  public  employment  service,  free  from  prejudice  and 
not  motivated  by  selfishness.  It  is  to  the  system  of 
registration  and  certificates  of  recommendation  that  or- 
ganized labor  has  registered  objection.  An  elaborate  sys- 
tem of  card  files  is  maintained  containing  the  records  of 
each  employee  engaged  in  the  establishments  of  members 
of  the  association.  This  system  is  a  valuable  aid  to  em- 
ployers in  so  far  as  it  gives  them  the  employment  record 
and  qualifications  of  employees  within  the  trade. 

The  evil  arises  when  an  association  which  is  openly  op- 
posed to  labor  organizations  issues  certificates  of  approval 


Employers'  Associations  399 

only  to  those  workers  who  have  no  affiliation  with  unions 
and  who  are  so  tractable  as  to  accept  undesirable  condi- 
tions of  employment  without  protest.  Discrimination  may 
thus  be  exercised  against  an  efficient  worker  for  no  other 
reason  than  membership  in  a  trade  union,  a  right  which 
the  employer  claims  for  himself  by  reason  of  his  member- 
ship in  the  employers'  association. 

Methods  and  policies  of  employers'  associations  in- 
clude: (1)  refusal  of  aid  to  members  operating  under  a 
closed  shop  agreement;  (2)  withholding  of  advertisements 
from  newspapers  friendly  to  unions;  (3)  persuasion  of 
strong  union  leaders  to  abandon  trade  union  leadership; 
(4)  detachment  of  workers  from  their  unions  by  forcing 
them  to  sign  individual  contracts  which  provide  a  penalty 
of  loss  of  unsettled  wages  in  case  of  a  strike;  (5)  the 
use  of  espionage  systems  and  detective  agencies  to  watch 
the  movements  of  the  unions,  and  to  ferret  out  employees 
who  are  actively  engaged  in  union  activities;  (6)  promo- 
tion of  industrial,  and  vocational  education,  to  break  down 
trade  union  restrictions  on  apprenticeship;  (7)  organiza- 
tion of  "fake"  or  company  unions  strictly  amenable  to 
the  wishes  of  the  employers  and  antagonistic  to  regular 
trade  unions;  (8)  provision  of  strike-breakers;  (9)  promo- 
tion of  statutes  providing  for  state  constabularies,  and 
encouragement  of  the  use  of  state  and  federal  troops  in 
localities  where  strikes  are  on;  (10)  widespread  and  often 
exaggerated  publicity  concerning  the  use  of  intimidation 
and  violence  by  labor  organizations  in  strikes,  the  misuse 
of  union  funds,  and  the  criminality  of  trade  union  activi- 
ties; (11)  organized  attack  upon  trade  unions  through 
the  courts,  obstructing  their  effectiveness  and  weakening 
their  financial  resources;  (12)  political  participation  to 
secure  the  election  of  men  who  are  known  to  be  con- 
servatives and  sympathetic  with  the  cause  of  employers; 
(13)  maintenance  of  lobbies  in  state  legislatures  and  Con- 
gress; and  (14)  promotion  of  educational  campaigns  set- 
ting forth  the  merits  of  freedom  of  contract  and  the  open 
shop,  spreading  propaganda  against  unionism  as  being 
radical  and  bolshevistic,  and  discouraging  labor  leaders. 


400  Employers'  Associations 

Examples  of  Successful  Employers'  Organizations. — 1. 
The  National  Association  of  Manufacturers. — This  associa- 
tion was  organized  at  Cincinnati,  in  1895,  and  incor- 
porated under  the  laws  of  New  York  in  1905.  Although 
established  chiefly  to  promote  trade,  especially  foreign 
trade,  this  body  has  adopted  a  very  definite  labor  policy, 
and  to-day  organized  labor  in  the  United  States  has  no 
greater  single  antagonist  than  this  national  association. 
The  membership  fee  is  $50,  and  in  1915  the  membership 
had  grown  to  4,000.  In  1921  the  association  itself  was 
composed  of  5,700  different  concerns,  and  it  had  organ- 
ized the  National  Industrial  Council  which  is  comprised 
of  approximately  300  state  and  local  employers'  associa- 
tions. These  300  organizations  represent  55,000  industrial 
establishments,  and  it  is  estimated  that  the  National  Asso- 
ciation of  Manufacturers  represents,  through  itself  and 
the  council,  not  less  than  60,000  different  employing  con- 
cerns which  have  about  6,000,000  employees  and  produce 
from  75  to  80  per  cent  of  the  manufactured  commodities 
of  the  country. 

The  aggressive  labor  policy  of  the  association  dates 
from  1903,  when  an  effort  was  made  at  the  New  Orleans 
convention  to  enlist  the  support  of  the  organization  in 
a  fight  against  the  union  shop,  the  boycott,  the  strike,  and 
the  exemption  of  labor  unions  from  prosecution  under 
the  Sherman  Anti-Trust  law  and  from  liability  to  injunc- 
tive  action  by  the  courts.  The  growing  power  of  tho 
American  Federation  of  Labor  was  the  reason  for  alarm. 
Although  sympathetic  with  these  suggestions,  the  associa- 
tion was  unwilling  to  divert  its  energies  from  trade  activi- 
ties, and  provided  for  a  committee  to  consider  the  ad- 
visability of  a  separate  organization  for  this  purpose.  A 
conference  of  members  and  officers  of  employers'  associa- 
tions and  citizens'  alliances  was  held  in  Chicago,  October 
29  of  that  year,  where  the  Citizens'  Industrial  Association 
of  America  was  formed.  The  general  purpose  of  the  new 
association  was  to  wage  war  against  unionism,  but  the 
organization  did  not  prove  wholly  satisfactory.  As  a 
result  of  several  conferences  of  the  most  powerful  em- 


Employers'  Associations  401 

ployers'  associations  in  the  country,  there  was  formed,  in 
1907,  a  voluntary  association  known  as  the  National  Coun- 
cil for  Industrial  Defense.  This  new  movement  was  also 
sponsored  by  the  National  Manufacturers'  Association. 
The  real  purpose  of  the  council  was  to  oppose  labor  legis- 
lation in  Congress  and  the  state  legislatures  and  to  fight 
the  "vicious  labor  trust."  The  activities  and  methods  of 
the  National  Manufacturers'  Association  in  influencing 
elections  and  legislation  were  exposed  in  1913,  in  the  New 
York  World  and  the  Chicago  Tribune,  by  Martin  M.  Mul- 
hall,  a  former  agent  of  the  association.  In  recent  years 
the  association's  activities  in  behalf  of  the  open  shop  and 
against  the  strike,  boycott,  and  labor  legislation  have  been 
very  vigorous.  It  distributes  free  bulletins  on  these  issues, 
maintains  an  open  shop  department,  and  publishes  period- 
icals. Functioning  through  well-paid  experts,  state  asso- 
ciations of  manufacturers,  and  numerous  local,  district, 
and  national  organizations,  its  policies  are  executed  with 
great  effectiveness. 

2.  The  League  for  Industrial  Rights. — The  League  for 
Industrial  Rights  was  organized  in  1902,  under  the  name 
of  the  American  Anti-Boycott  Association,  the  purpose  of 
which  was  to  attack  organized  labor  through  the  courts 
and  to  "maintain  law  and  order  and  individual  liberty 
in  the  field  of  industrial  relations."  During  the  first 
fifteen  years  of  its  existence  the  league  had  a  compara- 
tively small,  but  loyal  and  persistent  membership.  With 
the  serious  labor  problems  of  the  war  and  reconstruction 
periods  straining  industrial  relations,  its  membership  and 
power  have  increased.  It  is  now  regarded  by  employers 
as  the  chief  source  of  information  concerning  the  legal 
and  constitutional  phases  of  industrial  relations.  The 
League,  moreover,  advises  its  membership  relative  to  the 
most  helpful  ideas  and  experiments  in  improving  these 
relations.  It  maintains  councils  in  New  York,  Washing- 
ton, Chicago,  St.  Louis,  Memphis,  San  Francisco,  and 
other  cities  where  conditions  require  its  services.  Among 
the  most  decisive  legal  victories  which  the  league  has  won 
for  employers  are  the  Danbury  Hatters'  (1908)  and  the 


40£  Employers*  Associations 

Buck  Stove  &  Range  Company  (1907)  cases.  For  dis- 
obeying a  sweeping  order  of  injunction  restraining  a  boy- 
cott against  the  latter  company,  Samuel  Gompers,  Frank 
Morrison  and  John  Mitchell,  officials  of  the  American 
Federation  of  Labor,  were  sentenced  to  terms  of  imprison- 
ment of  one  year,  nine  months,  and  six  months  respec- 
tively. Under  the  former  case  the  Hatters'  Union  was 
fined  $232,240  damages  for  boycotting  Loewe  and  Com- 
pany. In  February,  1908,  the  Supreme  Court  of  the 
United  States  handed  down  an  opinion  that  labor  unions 
in  the  exercise  of  the  boycott  might  come  under  the  con- 
demnation of  the  Sherman  law.  It  was  this  opinion  that 
was  responsible  for  the  victory  of  the  employers  in  the 
Hatters'  case.  More  recently  (1921)  the  league  secured 
another  important  decision  in  the  Duplex  Printing  Press 
Company  case  in  which  the  opinion  of  the  Court  prac- 
tically ended  the  contention  that  the  labor  provisions  of 
the  Clayton  Act  (1914)  exempt  labor  unions  from  the 
anti-trust  laws,  reaffirmed  the  power  of  the  courts  to  use 
the  injunction  in  labor  troubles,  and  asserted  the  right 
of  private  parties  to  be  protected  from  primary  or 
secondary  boycotts  in  interstate  commerce. 

The  league  has  maintained  an  effective  lobby  at  Wash- 
ington for  the  prevention  of  legislation  exempting  labor 
from  anti-trust  laws,  abolishing  injunctions,  repealing  the 
law  of  conspiracy  and  otherwise  limiting  the  power  of  the 
courts.  Recently  the  league  has  sought  to  have  enacted 
laws  (1)  to  "  maintain  the  supremacy  of  government  and 
protect  the  interests  of  society";  (2)  to  establish  the  re- 
sponsibility of  unincorporated  associations  (chiefly  labor 
organizations)  under  the  law  by  giving  them  the  capacity 
of  suing  and  being  sued;  (3)  to  make  it  illegal  for  any 
organization  to  use  its  influence,  resources,  and  machinery 
to  carry  on  industrial  warfare  except  as  a  last  resort ; 
(4)  to  forbid  policemen  and  firemen  from  engaging  in  a 
strike  or  joining  a  labor  union;  and  (5)  to  provide  that 
conditions  of  employment  on  public  utilities  shall  be 
regulated  by  disinterested  agencies  and  that  strikes  and 
lockouts  hindering  transportation  shall  be  prohibited.  The 


Employers'  Associations  403 

league  protects  employers  from  union  interference  by 
drawing  up  specific  contracts  and  formulating  constitu- 
tions, by-laws,  and  policies  for  shop  committee  systems 
designed  to  keep  out  unions.  More  than  2,000  employing 
concerns  are  represented  in  the  league.  In  1921  the 
executive  secretary  stated  that  its  activities  are  confined 
primarily  to  interpreting,  enforcing,  and  preserving  the 
laws  of  the  country  which  protect  the  manufacturer  and 
the  nonunion  man  against  picketing,  boycotting,  and  sym- 
pathetic and  other  unlawful  strikes;  and  in  securing 
greater  respect  for  law  and  a  better  understanding  of  the 
principles  of  liberty.  The  league  claims  that  it  is  respon- 
sible for  the  abandonment  of  many  vicious  practices  by 
trade  unions.  Its  official  organ  is  Law  and  Labor. 

3.  The  National  Founders'  Association. — The  National 
Founders'  Association  was  formed  in  Cincinnati,  in  1898. 
The  original  purpose  was  to  provide  machinery  for  bar- 
gaining collectively  with  the  Iron  Moulders'  Union  of 
North  America  which  was  organized  in  1859  and  had  ac- 
quired considerable  power  in  machine  foundries.  In- 1899 
the  "New  York  Agreement"  was  made,  which  provided 
for  the  settlement  of  disputes  by  a  joint  board  consisting 
of  an  equal  number  of  representatives  of  employers  and 
employees.  This  agreement  was  abandoned  in  1904  on 
account  of  the  failure  to  agree  on  its  interpretation.  Since 
that  time  the  association  has  operated  independently  of 
the  union  and  under  a  policy  of  freedom  of  contract  which 
is  based  upon  the  open  shop  principle. 

Its  present  policies  may  be  summarized  as  follows:  (1) 
the  right  of  .an  employee  to  work  regardless  of  his  affilia- 
tion or  nonaffiliation  with  a  union;  (2)  the  operation  of 
moulding  machines  and  improved  appliances  without  re- 
strictions by  labor  organizations ;  (3)  freedom  of  appren- 
ticeship; (4)  liberty  of  the  employer  to  run  his  business 
as  he  pleases;  (5)  a  fair  day's  work  for  a  fair  day's  pay; 
and  (6)  no  limitations  on  the  employers'  method  of  indus- 
trial remuneration.  The  association  procures  for  members 
workingraen  to  take  the  place  of  those  on  strike,  to  the 
extent  of  70  per  cent  of  the  average  pay-roll  according 


404  Employers'  Associations 

to  the  last  two  quarterly  reports  preceding  the  strike; 
makes  provision  to  have  work  done  for  these  members 
in  other  shops  to  the  extent  of  70  per  cent  of  the  normal 
production;  and  gives  direct  financial  help,  the  amount 
to  be  determined  by  the  administrative  council,  but  in  no 
case  to  exceed  $2  per  man  per  day  to  the  extent  of  70 
per  cent  of  the  average  number  of  men  employed.  A 
bonus  and  certificates  of  loyalty  are  given  to  strike- 
breakers in  the  employ  of  the  association. 

No  member  of  the  association  is  allowed  to  make  a  set- 
tlement with  his  workers  without  the  consent  of  the  ad- 
ministrative council.  An  effective  blacklist  is  made 
against  those  workers  who  go  on  strike,  so  that  a  person 
who  has  been  on  strike  in  the  plant  of  one  member  of 
the  association  is  unable  to  secure  employment  in  the 
plants  of  the  other  members.  For  administrative  purposes 
there  are  ten  districts  with  a  district  committee  of  five 
members  each.  There  is  a  president,  vice-president, 
treasurer,  auditing  committee,  administrative  council  and  a 
commissioner.  The  administrative  council  consists  of  the 
chairman  and  vice-chairman  of  each  district,  together  with 
the  president,  vice-president,  and  treasurer  of  the  associa- 
tion. This  is  the  real  administrative  body  of  the  national 
organization.  The  executive  work  is  done  by  the  com- 
missioner, a  salaried  official,  who  is  appointed  by  the 
administrative  council.  The  commissioner,  who  is  the 
business  agent  of  the  association,  corresponds  to  the  busi- 
ness agent  of  the  trade  union.  The  annual  dues  of  $50 
formerly  required  by  the  organization  have  been  abolished, 
but  each  member  contributes  to  the  reserve  or  defense 
fund  and  pays  regular  and  special  assessments  to  aid  the 
work  of  the  association.  Each  member  contributes  in 
proportion  to  the  average  number  of  moulders  employed, 
the  amounts  ranging  from  40  cents  for  coremakers  to  60 
cents  for  journeymen  floor  moulders.  The  minimum 
assessment  for  any  one  plant  is  $25  a  quarter.  Special 
assessments,  which  are  determined  by  the  administrative 
council,  are  made  to  provide  for  emergencies,  and  are 
levied  on  the  basis  of  the  number  of  employees  reported 


Employers'  Associations  405 

for  the  preceding  two  quarters,  prorated  as  above.  Assess- 
ments for  strike  benefits  have  been  one  of  the  chief  causes 
for  resignations  from  the  association. 

The  National  Founders'  Association,  in  common  with 
other  organizations  of  employers,  keeps  a  representative 
at  Washington  to  watch  over  legislation,  and  it  has  joined 
with  other  associations  in  fighting  various  forms  of  labor 
legislation  and  in  securing  the  enactment  of  laws  to  bene- 
fit business.  In  conjunction  with  the  National  Metal 
Trades  Association  it  publishes  the  Open  Shop  Review, 
through  which  it  disseminates  effective  propaganda 
against  unionism.  A  labor  department  is  maintained  for 
the  purpose  of  recruiting  skilled  and  unskilled  workers. 
No  charge  is  made  for  this  service,  and  it  has  been  a 
valuable  agency  in  procuring  workers  to  replace  strikers. 
The  policies  and  methods  of  the  association  are  essentially 
hostile  to  trade  unionism. 

4.  The  National  Metals  Trades  Association. — This  is  an 
association  of  employers  engaged  in  the  manufacture  of 
metal  goods  of  all  kinds.  It  was  organized  in  the  fall 
of  1899  for  the  purpose  of  eliminating  strikes  and  lock- 
outs by  a  process  of  conciliation  and  arbitration.  A  joint 
board  of  conciliation  was  formed,  consisting  of  an  equal 
number  of  representatives  of  the  Association  and  the 
International  Association  of  Machinists.  The  Chicago 
Agreement  of  1900  is  among  the  most  notable  agreements 
that  have  been  drawn  up  between  capital  and  labor.  In 
190.1,  however,  a  rupture  took  place  in  the  joint  relations 
which  resulted  in  the  abrogation  of  the  agreement  and  a 
declaration  of  principles  by  the  employers,  on  the  basis 
of  which  they  have  ever  since  proceeded  in  their  employ- 
ment relations. 

The  fundamental  objects  of  the  association  are  prac- 
tically the  same  as  those  of  the  National  Founders'  Asso- 
ciation. The  principle  of  the  open  shop  is  rigidly  main- 
tained ;  the  national  and  affiliated  associations  operate 
employment  depart monts;  independent  workers  are  se- 
cured to  take  the  place  of  strikers  to  the  extent  of  seven- 
tenths  of  the  number  of  employees  at  work  in  the  plant 


406  Employers'  Associations 

prior  to  the  strike,  according  to  the  last  quarterly  report ; 
a  bonus  is  given  strike-breakers;  and  members  whose 
workers  go  on  strike  are  tided  over  the  difficulty  by 
financial  and  other  aid.  The  administrative  council  is  the 
most  active  guardian  of  the  association's  welfare.  Four- 
fifths  of  the  vote  of  the  annual  convention  or  of  a  special 
convention  is  required  to  sanction  a  general  lockout. 
Local  lockouts  must  be  sanctioned  by  a  vote  of  members 
employing  nine-tenths  of  the  operatives  which  are  under 
the  jurisdiction  of  the  district  or  local  branch,  and  must 
be  approved  by  a  two-thirds  vote  of  the  administrative 
council.  There  is  to  be  no  willful  provocation  of  strikes 
by  members,  and  all  settlements  must  be  approved  by 
the  administrative  council. 

In  addition  to  the  initiation  fee  of  $50,  there  are  quar- 
terly assessments  determined  according  to  the  needs  of 
the  association,  not  to  exceed  20  cents  per  operative  per 
month,  but  no  quarterly  assessment  of  less  than  $5  for 
any  one  plant  is  allowed.  Special  assessments  are  made 
in  emergencies,  according  to  the  determination  of  the 
administrative  council.  Assessments  are  based  upon  the 
number  of  operatives  in  the  plant.  There  are  two  funds ; 
namely,  the  general  fund  out  of  which  current  ordinary 
expenses  are  paid;  and  the  defense  fund,  which  is  used 
for  emergencies  occasioned  by  strikes,  lockouts  and  other 
difficulties.  No  member  can  resign  from  the  association 
during  a  strike  or  pending  a  settlement.  A  three-fourths 
vote  of  the  administrative  council  is  required  to  suspend 
or  expel  a  recalcitrant  member,  and  thirty  days'  notice 
by  the  commissioner  must  precede  expulsion.  The  Na- 
tional Metal  Trades  Association  evidences  a  policy  of 
antagonism  to  unionism. 

5.  Tine  National  Industrial  Conference  Board. — This  or- 
ganization was  founded  in  May,  1916,  to  unify  and  cen- 
tralize the  efforts  of  industrial  associations  in  studying 
and  solving  the  economic  problems  of  industry  and  to 
take  constructive  action  in  respect  to  issues  vital  to  the 
welfare  of  its  members.  Its  membership  includes  a  large 
number  of  employers'  organizations  representing  over 


Employers'  Associations  407 

60,000  manufacturers  who  employ  from  7,000,000  to 
8,000,000  workers.  The  board  claims  (1)  to  ascertain 
economic  facts  and  draw  conclusions  therefrom;  (2)  on 
the  basis  of  these  conclusions  to  secure  cooperative  action 
of  employers  and  manufacturers  for  the  promotion  of 
their  own  interests;  (3)  to  encourage  peaceful  and  satis- 
factory industrial  relations;  (4)  to  give  the  public  ac- 
curate information  regarding  industrial  conditions  and 
legislation;  and  (5)  to  command  the  attention  of  the 
government  when  formulating  industrial  legislation  and 
policies.  Through  its  weekly  publication,  The  Industrial 
News  Survey,  and  its  various  research  bulletins  on  indus- 
trial problems,  it  presents  effectively  the  point  of  view  of 
the  employing  group.  Its  publications,  excellent  in  many 
particulars,  have  been  not  unjustly  criticized  as  present- 
ing facts  furnished  solely  by  employers  and  manufacturers 
and,  therefore,  as  drawing  conclusions  which  would  not 
be  substantiated  by  impartial  investigations. 

6.  Building  Construction  Employers'  Association  of 
Chicago. — This  association,  organized  July  27,  1911,  is 
typical  of  similar  associations  in  other  cities  and  trades. 
The  constitution  of  the  association  declares  that  its  ob- 
jects are:  to  promote  just  and  equitable  treatment  in 
industrial  relations,  regularity  of  employment,  control  and 
enforcement  of  trade  agreements,  adjustment  of  disputes 
by  arbitration,  and  industrial  peace;  but  not  to  control 
prices  or  restrict  competition.  Through  its  executive 
board  the  Chicago  association  determines,  regulates,  and 
controls  the  epnduct  of  members  in  all  controversies  aris- 
ing between  its  members  and  employees.  It  also  seeks  to 
protect  the  trade  interests  of  its  members 

The  fundamental  principles  incorporated  into  its  agree- 
ments with  trade  unions  are:  (1)  no  limitation  of  output; 
(2)  no  restriction  of  the  use  of  machinery  or  tools;  (3) 
no  restriction  of  the  use  of  any  raw  or  manufactured  ma- 
terials except  prison  made ;  (4)  no  interference  with  work- 
men during  hours  of  employment;  (5)  no  prohibition  of 
apprentices;  (6)  foremen  to  be  selected  by  and  to  be 
the  agents  of  the  employers;  (7)  all  workmen  to  be  at 


408  Employers'  Associations 

liberty  to  work  for  whomever  they  see  fit;  and  (8)  all 
employers  to  be  free  to  employ  and  discharge  whomever 
they  wish.  The  initiation  fee  of  an  individual  member 
is  $25  and  of  representative  members  $1,  and  each  member 
pays  dues  to  the  extent  of  two-tenths  of  one  per  cent 
of  all  contracts  made  by  him,  the  minimum  dues  being 
$12  per  annum.  Members  may  be  fined,  suspended,  or 
expelled  for  failure  to  carry  out  the  agreements  made 
by  the  association.  The  grievance  committee  takes  charge 
of  all  disputes,  but  settlement  is  made  through  a  joint 
board  of  arbitration.  All  strikes  are  reported  to  the 
secretary  within  twenty-four  hours  of  the  time  they  begin. 
Local  associations  usually  support  a  business  manager 
who  is  the  official  representative  of  the  association  in  all 
business  dealings  with  members.  He  is  the  walking  dele- 
gate, or,  as  the  unions  call  him,  "the  business  agent  of 
the  millionaires'  club."  Building  contractors'  associa- 
tions are  usually  organized  into  state  associations. 

7.  The  Associated  Employers  of  Indianapolis. — This  suc- 
cessful militant  association  was  organized  in  January, 
1904,  for  the  purpose  of  achieving  community  betterment 
"through  the  scientific  and  collective  handling  of  vexa- 
tious industrial  problems."  Indianapolis  had  been 
strongly  unionized  and  strikes  were  frequent  prior  to  the 
advent  of  the  new  association  of  employers.  The  associa- 
tion has  well-defined  principles  that  guide  its  dealings 
with  wage-earners.  Harmonious  industrial  relations  are 
desired,  and  the  principle  of  a  fair  day's  work  for  a  fair 
day's  pay  is  adopted.  The  union  shop  is  opposed  on  the 
grounds  that  it  is  "un-American,  illegal,  and  unfair  to  the 
independent  workman  who  does  not  desire  to  join  the  union ; 
to  the  employer  who  prefers  to  operate  an  open  shop; 
and  to  the  public."  Lockouts,  strikes,  sympathetic 
strikes,  and  boycotts  are  opposed,  and  law  and  order  are 
defended.  The  association  seems  to  have  no  objection  to 
labor  organizations  as  such,  except  when  they  become 
active  and  endeavor  to  unionize  establishments.  There 
is  to  be  no  collective  determination  of  wage  contracts :  and 
no  interference  with  the  absolute  rights  of  property  ancj 


Employers*  Associations  409 

person,  including  the  right  of  the  employer  to  engage  any 
workmen  under  conditions  that  seem  to  him  fair.  The 
association  urges  betterment  of  working  conditions  and 
"just  wages  commensurate  with  individual  efficiency, 
loyalty,  and  service,"  but  the  employer  must  be  free  to 
determine  independently  what  constitutes  a  just  wage. 
Strikes  are  condemned  as  wasteful,  and  prevention  is 
urged  on  the  basis  of  economy. 

In  its  membership  of  about  five  hundred  persons  the 
association  has  a  representative  of  practically  every  de- 
partment of  industrial  and  commercial  activities.  The 
membership  fee  is  $10,  and  dues  are  $12  per  annum  with 
an  additional  fifty  cents  a  year  for  each  additional  em- 
ployee in  excess  of  twelve.  Moral  and  financial  support 
is  given  members  in  the  event  of  a  conflict  with  labor 
involving  "the  freedom  of  contract,  open  shop,  employ- 
ment of  apprentices,  restriction  of  output,  strikes  or 
sympathetic  strikes,  and  boycotts."  Members  thus  aided 
arc  not  allowed  to  make  an  independent  settlement  that 
will  sacrifice  these  principles,  but  must  secure  the  sanction 
and  approval  of  the  executive  committee  in  the  negotia- 
tion of  such  an  agreement.  The  so-called  American  plan 
is  promoted  and  it  is  stated  that  90  per  cent  of  the 
industrial  enterprises  of  the  city  now  operate  on  the  open 
shop  basis,  some  industries  being  100  per  cent  open  shop. 
The  building  and  the  printing  trades  have  been  able  to 
withstand  the  attacks  of  the  association. 

If  space  permitted,  the  following  associations  should  be 
discussed:, The  National  Civic  Federation  (1910),  which 
promotes  industrial  peace;  The  American  Newspaper 
Publishers'  Association  (1887) ;  the  United  Typothetae 
(1887),  which  has  an  "open  shop  division"  organized  in 
1912,  and  a  "closed  shop  division"  created  in  1916;  the 
National  Erectors'  Association  (1903),  a  militant  associa- 
tion in  the  iron  and  steel  industry  and  the  building  trades; 
the  Stove  Founders'  National  Defense  Association  (1886), 
originally  militant,  but  now  conciliatory;  and  the  Build- 
ing Trades  Employers'  Association  of  New  York  City, 
(1903), 


410  Employers'  Associations 

The  Achievements  of  Employers'  Associations. — Asso- 
ciations of  employers,  like  associations  of  employees,  have 
amply  justified  their  existence  in  the  eyes  of  those  whose 
particular  interests  they  have  been  created  to  promote. 
The  achievements  of  such  organizations  cannot  be  meas- 
ured statistically.  There  is  justification  for  the  claim  that 
employers'  associations  have  (1)  greatly  lessened  the  fre- 
quency, if  not  abolished,  the  sympathetic  strike  in  im- 
portant industrial  centers;  (2)  checked  the  movement  of 
capital  from  those  cities  in  which  incessant  labor  troubles 
discouraged  investment  and  the  establishment  of  indus- 
trial enterprises;  (3)  demonstrated  the  effectiveness  of 
the  lockout  as  a  means  of  breaking  strikes ;  (4)  protected 
the  nonunion  man  in  the  exercise  of  his  constitutional 
right  to  work  for  whom  he  pleases;  (5)  secured  the  pas- 
sage of  legislation  designed  to  promote  the  general  in- 
terests of  employers,  and  prevented  the  enactment  of  laws 
sponsored  by  the  American  Federation  of  Labor  and  other 
labor  interests  which  would  free  unions  from  prosecution 
as  conspiracies  and  interfere  with  the  employer's  freedom 
in  the  administration  of  his  business;  (6)  attacked  labor 
organizations  successfully  in  the  courts  by  causing  the 
issue  of  injunctions  to  restrain  their  actions  in  boycott, 
and  even  caused  unions  to  be  sued  for  damages;  (7) 
introduced  in  many  trades  and  industries  acceptable  agree- 
ments with  employees,  either  individually  or  collectively, 
providing  for  the  amicable  adjustment  of  industrial  dis- 
putes; and  (8)  sponsored  industrial  betterment  move- 
ments which  are  designed  to  promote  the  welfare  of  the 
workers  and  assure  industrial  peace. 

The  Attitude  of  Organized  Labor  Towards  Employers' 
Associations. — It  is  natural  that  organized  labor  should 
criticize  the  methods  and  policies  of  organized  capital. 
In  so  doing  the  workers  are  merely  practicing  what  em- 
ployers themselves  practice  on  a  general  scale.  Har- 
monious relationships  have  not  yet  been  established 
between  these  two  groups  of  industrial  interests.  Organ- 
izations of  employers  necessarily  imply  limitation  of  the 
power  of  organized  labor,  and  vice  versa.  Labor  is  not 


Employers'  Associations  411 

fundamentally  opposed  to  employers'  associations  as  such, 
but  rather  to  what  the  workers  conceive  to  be  abuses 
and  injustices  imposed  by  these  associations.  Organiza- 
tions of  labor  have  been  severely  denounced  in  periodicals 
and  press  propaganda  issued  from  the  offices  of  associa- 
tions of  employers.  Trade  union  abuses  have  often  been 
emphasized  to  the  total  exclusion  of  the  constructive  work 
of  the  unions.  Many  prominent  labor  leaders,  however, 
have  recognized  the  necessity  and  value  of  employers' 
associations.  John  Mitchell  stated  that  "unions  should 
not  adopt  an  antagonistic  policy  towards  organizations 
of  employers,  unless  such  organizations  show  themselves 
distinctly  and  unmistakably  hostile  to  labor.  .  .  .  Trade 
unions  recognize  that  an  association  of  employers  is  better 
able  to  combat  them  than  a  number  of  individual  com- 
peting employers;  but  they  also  recognize  that  the  asso- 
ciation is,  as  a  rule,  more  responsible,  more  conservative 
and  better  disposed  than  the  individual  employers  of 
whom  it  is  composed,"  and  "workingmen  in  asserting 
their  right  to  combine  are  obliged,  by  the  logic  of  their 
demands,  to  concede  an  equal  right  to  employers."* 
Samuel  Gompers  expresses  a  similar  view:  "I  want  to 
see  the  organization  of  the  wage-earners  and  the  organiza- 
tion of  the  employers,  through  their  respective  represen- 
tatives .  .  .  discuss  questions  of  wages,  and  hours  of 
labor  and  things  consistent  with  the  industrial  an'd  com- 
mercial success  of  our  country,  and  that  shall  tend  to 
the  uplifting  of  the  human  family."  He  adds,  "We  wel- 
come their  organization,  but  we  ask  them  to  follow  the 
path  of  moderation  and  reason,  the  same  that  they  de- 
mand of  us  as  workingmen.  When  they  assume  a  right 
for  themselves,  they  cannot  deny  that  same  right  to  us. 
...  To  some  extent  they  have  grasped  the  idea  of  or- 
ganization or  association  among  themselves,  but  they  fail 
to  concede  the  necessity  of  organization  among  wage- 
earners.  ' ' B 

While  not  denying  the  employers'  right  to  form  associa- 

*  John  Mitchell,  Organized  Labor,  pp.  IKS,  102. 

1  Samuel  flomprrs,  Labor  and  the  Employer,  pp.  41,  44,  45. 


412  Employers'  Associations 

tions,  trade  unionists  have  criticized  severely  their  prac- 
tices. It  is  contended  that  employers  act  collectively 
themselves  but  deny  a  corresponding  right  to  their  em- 
ployees; employ  officials  and  managers  who  are  not  em- 
ployers, and  who,  consequently,  have  no  direct  contact 
with  the  workers  or  knowledge  of  employment  conditions ; 
employ  armed  guards  in  strikes  and  lockouts  who  provoke 
and  create  violence;  operate  employment  bureaus  which, 
through  the  use  of  the  card-record  system,  become  agen- 
cies for  blacklisting  employees  who  are  sympathetic  with 
unionism;  boycott  union  labor  and  the  union  label  on 
goods;  maintain  spies  to  find  out  union  activities,  harass 
members,  and  provoke  strikes;  support  groups  of  strike- 
breakers and  thugs  for  use  in  industrial  war;  defend 
members  in  strikes  and  lockouts  without  a  fair  determina- 
tion of  the  reasons  for  grievance;  carry  on  campaigns 
for  the  so-called  open  shop,  which  in  reality  means 
a  shop  closed  to  union  labor;  use  their  connections  with 
banks  to  secure  the  refunding  of  interest,  and  so  hold 
members  in  times  of  strikes ;  and  manipulate  their  adver- 
tising patronage  as  a  means  of  controlling  the  press  and 
suppressing  the  real  facts  underlying  industrial  strife. 

The  organized  workers  contend,  moreover,  that  the 
members  of  employers'  associations  influence  judges  and 
officials  through  business  contacts,  thus  jeopardizing  the 
case  of  the  workers,  and  even  go  so  far  as  to  influence 
trade  union  officials  and  members  through  bribes,  promo- 
tions, and  other  inducements.  The  maintenance  of  legis- 
lative lobbies  to  defeat  labor  legislation,  the  tendency  to 
maintain  a  high  price  under  the  pretense  that  labor  costs 
are  the  responsible  factor,  and  the  failure  to  discipline 
members  for  breach  of  contracts  and  agreements  with  the 
unions  are  among  the  many  other  criticisms  of  these 
associations.  Many  of  these  offenses  are  denied  by  em- 
ployers, and  those  admitted  are  defended  on  the  grounds 
that  they  are  legitimate  practices  and  absolutely  neces- 
sary as  defensive  measures  against  aggressive  trade  unions. 
Employers  logically  maintain,  moreover,  that  those  who 
use  the  strike,  boycott,  unfair  list,  union  shop,  walking 


Employers'  Associations  413 

delegate,  and  labor  lobbies,  and  refuse  to  be  incorporated, 
have  no  adequate  cause  to  condemn  the  counter-practices 
of  associations  of  employers. 

Economic  and  Social  Justification. — Associations  of  em- 
ployers and  of  employees  are  inevitable  phases  of  indus- 
trial evolution;  when  managed  constructively  both  are 
indispensable  agencies  of  industrial  peace.  The  complex 
structure  of  modern  industry  has  made  individual  bar- 
gaining obsolete  for  both  the  employer  and  the  worker. 
The  growing  power  of  unionism  and  its  exercise  of  force 
upon  defenseless  individual  employers  necessitates  collec- 
tive action  on  the  part  of  the  employing  group.  The 
strike,  boycott,  picketing,  limitation  of  output,  closed 
shop,  and  restriction  of  apprentices  have  been  in  no  small 
measure  responsible  for  the  introduction  of  the  lockout, 
blacklist,  labor  bureau,  company  union,  and  the  profes- 
sional strike-breaker. 

Militant  associations  of  employers,  no  less  than  militant 
trade  and  industrial  unions,  arc  responsible  for  industrial 
conflict  and  the  accentuation  of  class-consciousness;  both 
types  of  associations  are  a  social  menace.  Furthermore, 
in  recent  years  employers'  associations  in  the  building 
trades  in  our  great  cities  have  been  accused  of  acting 
in  collusion  with  building  trades'  councils  to  introduce 
monopolistic  control  of  price,  thus  injuring  the  public. 
Official  investigations  in  New  York  and  Chicago  have  re- 
sulted in  the  indictment  of  employers  and  trade  union 
oflicials  for  unlawful  conspiracy  in  restraint  of  trade. 

Conclusions. — In  order  to  gain  public  approval  and 
confidence  associations  of  employers  must  adopt  a  three- 
fold policy.  (1)  Every  effort  must  be  made  to  prevent 
monopolistic  control  of  prices,  whether  secured  by  the 
associated  employers  independently  or  acting  in  collusion 
with  labor  organizations.  (2)  Their  activities  with  regard 
to  industrial  relations  must  be  constructive  rather  than 
destructive,  that  is,  they  must  recognize  the  necessity  and 
justification  of  organization  and  collective  bargaining  on 
the  part  of  the  workers,  and  accord  to  the  latter  the  same 
rights  and  privileges  which  they  claim  for  themselves. 


414  Employers'  Associations 

(3)  They  must  recognize  that  industry,  business,  and  com- 
merce should  be  administered  for  public  service  and  not 
for  the  aggrandizement  of  private  interests ;  that  produc- 
tion is  a  partnership  in  the  management  of  which  con- 
sumers and  employees  should  have  a  voice.  Functioning 
to  these  ends,  employers'  associations  will  become  an 
institution  fundamental  to  the  maintenance  of  industrial 
peace  and  the  promotion  of  social  progress. 


SELECTED  REFERENCES 

ADAMS,  T.  S.,  AND  SUMNER,  H.  L.,  Labor  Problems,  1905,  pp. 

279-285. 
BONNETT,  C.   E.,  Employers'  Associations  in  the  United  States, 

1922. 
ELIOT,    C.    W.,    Employers'    Policies    in    the    Inditstrial    Strife, 

Harper's  Magazine,  110:528-533,  1905. 

GOMPERS,  SAMUEL,  Labor  and  the  Employer,  1920,  pp.  38-57. 
HOLLANDER,  R.  F.,  AND  BARNETT,  G.  E.,  Studies  in  American 

Trade  Unionism,  1907,  Chap.  VII. 
HOXIE,  R.  F.,  Trade  Unionism  in  the  United  States,  1917,  Chap. 

VIII. 
MARCOSSON,   I.   F.,  Labor  Met   by  Its   Own   Methods,  World's 

Work,  7:4309-4314,  1904. 

MITCHELL,  JOHN,  Organized  Labor,  1903,  Chap.  XXII. 
STECKER,  MARGARET,  The  National  Founders'  Association,  Quar- 
terly Jour,  of  Econ.,  30:352-386,  1916. 
TEAD,  ORDWAY,  AND  METCALP,  H.  C.,  Personnel  Administration, 

1920,  Chap.  XXXIII. 
UNITED  STATES  BUREAU  OP  FOREIGN  AND  DOMESTIC  COMMERCE, 

Special  Agents'  Series,  Bulletin  102,  1915. 
UNITED   STATES   COMMISSION  ON   INDUSTRIAL  RELATIONS,  Final 

Eeport,  1916,  pp.  117-119. 
VAN   CLEAVE,  J.  W.,   The  Work  of  Employers'  Associations  in 

the  Settlement  of  Labor  Disputes,  Amer.  Acnd.  of  Pol.  and 

Soc.  Science,  Philadelphia,  Annals,  36:373-380,  1910. 
WILLOUGHBY,  W.  F.,  Employers'  Associations  for  Dealing  with 

Labor  in  the  United  States,  Quarterly  Jour,  of  Econ.,  20 :110- 

150,  1905-1906. 
WRIGHT,    P.    G.,    The   Contest   in   Congress    between   Organised 

Labor  and  Organized  Business,  Quarterly   Jour,   of  Econ., 

29 :235-261,  1914-1915. 


' 


THE  ADJUSTMENT  OF  INDUSTRIAL  DISPUTES 

Force  Versus  Law  in  Industry. — Strong  organizations  of 
employers  and  employees  are  indispensable  to  successful 
collective  bargaining.  The  existence  of  powerful  organ- 
izations, however,  is  not  in  itself  a  guaranty  of  industrial 
peace  and  fair  play.  Employers  and  employees  have  never 
been  organized  so  strongly  and  efficiently  in  the  United 
States  as  they  are  at  present,  and  yet  industrial  unrest 
has  never  been  more  general.  Armed  for  conflict,  each 
side  has  been  eager  to  test  its  own  strength  and  the  power 
of  its  opponent.  The  pendulum  of  advantage  and  victory 
swings  first  to  the  one  camp  and  then  to  the  other,  and 
successes  are  exploited  to  the  limit. 

There  is,  however,  a  growing  tendency  on  the  part  of 
enlightened  associations  of  employers  and  employees  to 
recognize  the  danger  and  waste  of  leaving  the  settlement 
of  industrial  controversies  to  the  arbitrament  of  industrial 
warfare.  In  personal  relations  the  jungle  method  of  force 
has  been  largely  superseded  by  legal  adjustment  based 
upon  examination  of  the  facts  and  conditions  that  are 
responsible  for  the  difficulty,  and  even  in  international 
political  relations  progressive  steps  are  being  taken  to 
abolish  the  barbarous  practice  of  war.  It  is  not  too  much 
to  expect,  therefore,  that  in  industry  the  joint  conference 
will  replace  the  arbitrary  exercise  of  force,  and  that  law 
and  order  will  supersede  chaos  and  disorder.  The  trade 
agreement,  conciliation,  mediation,  investigation,  and 
arbitration  are  the  methods  generally  used. 

Definitions. — The  trade  agreement  is  a  more  or  less 
formal  arrangement  under  which  the  conditions  of  employ- 
ment are  governed  by  an  agreement  made  between  an  em- 
ployer or  an  association  of  employers  and  a  union  of 
employees.  The  agreement  is  made  at  a  joint  conference 

415 


416     The  Adjustment  of  Industrial  Disputes 

and  remains  in  force  for  a  period  of  years.  Trade  agree- 
ments are  moral  rather  than  legal  instruments,  and  the 
responsibility  for  their  enforcement,  therefore,  is  moral 
rather  than  legal.  In  this  process  of  collective  bargaining 
two  distinct  types  of  industrial  differences  may  arise. 
(1)  There  are  those  differences  that  concern  the  inter- 
pretation of  existing  agreements.  Although  these  dif- 
ferences may  assume  a  serious  nature,  they  are  usually 
viewed  as  being  of  a  minor  character.  (2)  There  are  the 
more  serious  disputes  that  have  to  do  with  the  terms 
to  be  included  in  the  agreement  which  shall  govern  future 
employment  relations.  Trade  agreements  may  fail  or  be 
abrogated  either  by  employers  or  by  employees,  and  it 
then  becomes  necessary  to  resort  to  conciliation,  media- 
tion, voluntary  arbitration,  compulsory  investigation,  or 
compulsory  arbitration. 

Confined  to  its  strictest  usage,  the  term  conciliation  refers 
to  the  settlement  of  industrial  disputes  either  by  direct 
conference  between  the  employers  and  employees  in- 
volved, or  by  joint  boards  representing  them,  without  the 
assistance  of  outside  agencies.  When  an  outside  person 
or  body  intervenes  informally  to  bring  together  employers 
and  employees  in  a  joint  conference  for  the  purpose  of 
settling  their  differences  in  a  peaceable  manner,  the  pro- 
cedure is  designated  as  mediation.  The  terms  mediation 
and  conciliation  are  often  used  interchangeably  in  the 
United  States.  The  element  of  compulsion  is  absent  from 
both  methods.  The  conciliator  or  mediator  has  been  aptly 
described  as  a  confidential  adviser.  He  is  essentially  an 
industrial  diplomat.  Whether  the  mediator  be  a  private 
person,  a  government  official,  or  a  government  board,  care 
is  generally  taken  not  to  impose  the  outside  viewpoint 
upon  either  the  management  or  the  employees  concerned 
in  the  dispute,  but  rather  to  find  some  mutually  acceptable, 
though  perhaps  not  always  mutually  satisfactory,  basis 
for  discussion  and  adjustment.  The  procedure  is  diplo- 
matic rather  than  judicial;  it  is  not  to  hear  both  sides 
and  then  determine  the  rights  and  wrongs  of  the  situation, 
or  to  pass  judgment  and  then  enforce  its  decision,  but 


The  Adjustment  of  Industrial  Disputes     417 

rather  to  suggest  a  conference  and  a  basis  of  discussion 
and  agreement  between  the  disputants  and  pave  the  way 
for  the  resumption  of  friendly  and  peaceful  relations. 
Conciliation  and  mediation  cease  if  the  intermediary  seeks 
to  influence  the  parties  to  the  dispute  by  the  threat  of 
government  interference  or  the  pressure  of  public  opinion. 

In  case  the  parties  to  an  industrial  controversy  fail  to 
effect  an  amicable  settlement  by  themselves  or  with  the 
assistance  of  a  mediator,  and  agree  to  submit  the  questions 
at  issue  to  an  impartial  umpire  or  board,  the  procedure  is 
called  voluntary  arbitration.  This  method  ordinarily  in- 
volves mutual  consent  of  the  parties  to  submit  the  con- 
troversy to  the  adjudication  of  an  impartial  arbitrator; 
investigation  of  pertinent  facts  and  conditions  underlying 
the  dispute;  an  agreement  to  refrain  from  stoppage  of 
work  during  the  investigation;  formulation  of  an  award 
and  announcement  of  the  decisions  embodied  therein; 
and  the  elimination  of  the  strike,  lockout,  boycott,  and 
other  methods  of  industrial  warfare  during  the  term  of 
the  agreement  as  embodied  in  the  award.  Once  they  have 
formally  agreed  to  refer  their  dispute  to  an  arbitrator, 
both  sides  are  morally  bound  to  facilitate  proceedings, 
but  the  acceptance  of  the  award  is  purely  voluntary, 
unless  the  initial  agreement  provides  for  compulsory  ac- 
ceptance and  enforcement  of  the  award.  Usually,  how- 
ever, both  sides  are  reluctant  to  bind  themselves  to  accept 
the  decisions  of  the  arbitrator. 

Where  compulsory  investigation  is  provided  there  is  a 
state  board  of  investigation  and  recommendation,  which 
has  power  to  collect  all  requisite  information  for  an  in- 
telligent discussion  of  the  controversy  and  the  formula- 
tion of  recommendations.  Such  a  board  may  summon 
witnesses  either  upon  request  of  the  parties  to  the  dispute 
acting  independently  or  jointly,  or  upon  its  own  initiative, 
but  it  does  not  possess  legal  powers  to  enforce  its  awards. 
Compulsory  investigation  usually  involves  prohibition  of 
strikes  and  lockouts  preceding  the  investigation,  general 
publicity  of  the  findings  and  recommendations  of  the 
board,  voluntary  acceptance  of  the  award,  and  freedom 


418     The  Adjustment  of  Industrial  Disputes 

to  engage  in  a  strike  or  lockout  upon  rejection  of  the 
recommendations.  The  Canadian  Industrial  Disputes  Act 
of  1907  and  a  similar  law  enacted  in  Colorado  in  1915 
have  provisions  designed  to  preclude  strikes  and  lock- 
outs. In  the  United  States,  however,  many  statutes  pro- 
vide for  compulsory  investigation  without  compelling 
postponement  of  strikes  and  lockouts  during  the  inves- 
tigation. 

Compulsory  arbitration  takes  place  when  the  govern- 
ment, directly  or  indirectly,  brings  pressure  to  bear  upon 
the  parties  to  a  dispute  and  compels  them  to  submit  their 
differences  to  an  outside,  impartial  body  for  adjudication 
and  award.  Generally  speaking,  there  are  two  forms  of 
compulsory  arbitration.  If  the  government  forces  the  dis- 
putants merely  to  submit  their  case  to  an  impartial  body 
and  does  not  compel  acceptance  of  the  award,  the  method 
is  known  as  compulsory  arbitration  with  voluntary  award. 
In  case  a  law  is  enacted  which  compels  both  the  submission 
of  the  case  and  the  acceptance  of  the  arbitrator's  decision, 
the  method  is  compulsory  arbitration  with  compulsory 
award.  Under  both  methods  employers  and  employees  are 
forced  to  submit  their  dispute  to  arbitration,  to  refrain 
from  strikes  and  lockouts  pending  adjudication,  and  to 
produce  facts  and  give  testimony.  The  rendering  of  an 
award  is  compulsory.  The  only  difference  is  the  element 
of  compulsion  or  volition  in  acceptance  of  the  award. 
Usually  public  opinion  is  relied  upon  to  force  acceptance 
of  the  decision. 

In  addition  to  the  foregoing  terms,  primary  arbitration 
and  secondary  arbitration  are  sometimes  used,  the  former 
referring  to  "the  authoritative  settlement  by  impartial 
arbiters  of  the  terms  of  the  employment  contract  itself," 
and  the  latter  to  "the  adjudication  of  those  minor  dis- 
putes growing  out  of  the  interpretation  of  the  existing 
contract."  Primary  arbitration  is  fundamentally  judicial. 

Laws  and  Activities  of  the  Federal  Government. — The 
numerous  strikes  that  occurred  in  the  United  States  dur- 
ing the  decade  of  the  eighties  assumed  such  a  serious 
aspect  that  President  Cleveland,  in  a  special  message  to 


The  Adjustment  of  Industrial  Disputes    419 

Congress  in  1886,  urged  that  immediate  steps  be  taken 
to  provide  an  effective  agency  for  the  adjustment  of  in- 
dustrial controversies  affecting  interstate  commerce. 
Legislation  for  this  purpose  has  been  embodied  in  a  series 
of  acts,  beginning  with  the  Act  of  1888,  and  including 
the  Erdman  Act  of  1898,  the  Newlands  Act  of  1913,  sec- 
tion 8  of  an  act  passed  in  1913  which  created  the  Depart- 
ment of  Labor,  and  the  Transportation  Act  of  1920.  The 
law  of  1888  provided  initiatory  action  by  the  President 
of  the  United  States  for  voluntary  arbitration,  compulsory 
investigation,  and  publicity  of  decisions  in  controversies 
affecting  ''railroad  and  other  transportation  companies" 
engaged  in  interstate  traffic,  and  their  employees.  A  board 
of  arbitration  consisting  of  three  members,  one  each 
selected  by  the  disputants  and  a  third  by  these  two  mem- 
bers, was  provided  for,  but  their  award  was  not  binding 
upon  the  parties  to  the  dispute.  There  was  no  application 
of  this  part  of  the  act. 

Under  the  terms  of  the  Act  of  1888,  the  President  was 
given  power  to  appoint  two  commissioners  who,  with  the 
Commissioner  of  Labor,  were  to  constitute  a  board  of 
investigation  to  ascertain  facts  and  conditions  underlying 
industrial  controversies  that  affected  interstate  commerce. 
An  inquiry  could  be  initiated  in  three  ways:  by  the 
President  on  his  own  motion,  upon  application  .of  one 
of  the  parties  to  the  dispute,  or  upon  request  of  the 
governor  of  the  state  directly  concerned.  The  board  could 
subpena  witnesses  and  compel  submission  of  evidence. 
Although  the  measure  was  in  effect  for  practically  ten 
years,  there  was  no  attempt  to  utilize  its  arbitration  fea- 
tures, and  only  in  one  instance  was  the  machinery  of 
investigation  set  in  motion. 

In  July,  1894,  President  Cleveland  created  a  commis- 
sion to  investigate  and  report  upon  the  serious  strike 
of  the  employees  in  the  Pullman  car  shops.  The  arbitra- 
tion act  of  1888  was  repealed  by  the  Erdman  Act  of  1898, 
which  was  a  less  drastic  measure  than  would  have  resulted 
from  compliance  with  the  commission's  recommendations. 
The  act  of  1898  made  provision  only  for  mediation  and 


420     The  Adjustment  of  Industrial  Disputes 

arbitration,  and  not  for  investigation  and  publication  of 
findings.  The  provisions  of  the  new  law  were  made  ap- 
plicable only  to  those  classes  of  railroad  employees  ac- 
tually engaged  in  train  operation.  The  chairman  of  the 
Interstate  Commerce  Commission  and  the  Commissioner 
of  Labor  were  required,  upon  application  by  either  party 
to  a  controversy,  to  extend  their  efforts  with  a  view  to 
securing  an  adjustment  by  mediation.  A  permanent  board 
of  conciliation  was  thus  created.  Mediation  was  de- 
pendent upon  acceptance  by  both  parties.  The  terms  of 
agreements  effected  through  mediation  were  not  to  be 
made  public,  except  upon  authorization  by  the  parties 
to  the  dispute.  In  case  mediation  was  unsuccessful,  the 
mediators  were  to  endeavor  to  induce  the  parties  to  submit 
their  differences  to  arbitration.  One  arbitrator  was  to 
be  selected  by  each  party  to  the  dispute,  and  the  two  thus 
chosen  to  select  a  third.  The  law  required  that:  (1) 
Pending  arbitration,  the  status  obtaining  prior  to  the 
controversy  must  be  maintained;  (2)  the  award  shall  be 
final  and  conclusive,  unless  appealed  and  set  aside  for 
error  of  law;  (3)  the  parties  to  the  dispute  must  abide 
by  the  award,  which  is  enforceable  in  equity;  (4)  for  a 
period  of  three  months  neither  party  shall  cease  work 
in  protest  of  the  award,  except  upon  thirty  days'  written 
notice;  and  (5)  the  award  shall  continue  in  force  for 
a  period  of  one  year  and  no  new  arbitration  shall  be 
extended  on  the  same  subject  unless  the  provisions  of 
the  award  are  set  aside  upon  appeal. 

During  the  first  eight  and  one-half  years  of  its  existence 
the  Erdman  Act  was  practically  ineffective,  there  being 
only  one  attempt  to  utilize  its  provisions.  Subsequent  to 
1906,  however,  it  was  frequently  invoked  and  its  applica- 
tion was  decidedly  successful.  From  the  time  of  enact- 
ment in  June,  1898,  to  1912,  there  were  forty-eight  ap- 
plications for  mediation  and  arbitration  under  this  law. 
Nineteen  of  these  requests  came  from  employers,  thirteen 
from  the  employees,  and  sixteen  were  joint  applications. 
The  mediation  provisions  of  the  act  were  the  more 
generally  utilized. 


The  Adjustment  of  Industrial  Disputes    421 

In  1913  the  Erdman  Act  gave  way  to  the  Newlands  Act, 
which  provides  for  a  Commissioner  of  Mediation  and 
Conciliation  and  the  United  States  Board  of  Mediation 
and  Conciliation.  The  board  consists  of  the  commissioner 
and  two  other  government  officials,  all  of  whom  are  ap- 
pointed by  the  President  with  the  advice  and  consent  of 
the  Senate.  The  commissioner  serves  for  seven  years. 
In  the  event  of  a  controversy  to  which  the  law  applies, 
either  party  may  appeal  to  the  board  whose  duty  it  is 
to  seek  to  adjust  the  dispute  by  mediation  or,  failing  in 
this,  to  urge  arbitration.  In  arbitration  proceedings  the 
board  may  be  increased  from  three  to  six  members.  Each 
party  to  the  dispute  chooses  two  members,  or  one  member, 
as  the  case  may  be,  and  these  select  the  other  one  or  two 
members.  If  there  is  a  failure  to  agree  on  the  third 
member  or  members,  the  Board  of  Mediation  and  Con- 
ciliation makes  the  selection.  Upon  consent  of  both  par- 
ties to  the  controversy  the  board  of  arbitration  may  exer- 
cise powers  of  compulsory  investigation.  The  award  be- 
comes operative  in  ten  days  after  filing,  unless  exception 
is  taken  on  a  point  of  law.  During  the  four  years  ending 
June  30,  1917,  the  services  of  the  Board  of  Mediation  and 
Conciliation  were  used  in  seventy-one  cases,  most  of  which 
were  settled  by  mediation.  The  board  failed  to  effect 
an  agreement  in  the  railroad  dispute  in  1916.  The  action 
of  Congress  in  passing  the  Adamson  law  in  September, 
1916,  was  regarded  as  evidence  of  the  failure  of  the  New- 
lands  Act.  An  eight-hour  day,  and  the  appointment  of 
the  Eight-Hour  Commission  to  investigate  the  effects  of 
the  eight-hour  day  were  embodied  in  the  Adamson  law. 
The*  railway  brotherhoods  which  had  refused  voluntary 
arbitration  prior  to  the  enactment  of  this  law  again 
threatened  to  strike  in  March,  1917,  because  of  the  un- 
certain constitutionality  of  the  new  act  and  alleged  eva- 
sions of  its  provisions  by  the  railroads.  The  Board  of 
Mediation  and  Conciliation  was  again  unsuccessful,  and 
a  committee  of  the  Council  of  National  Defense  was  ap- 
pointed by  President  Wilson  to  mediate. 

Under  the  wartime  federal  control  of  railroads,  which 


422     The  Adjustment  of  Industrial  Disputes 

began  December  28, 1917,  the  Railroad  Wage  Commission 
was  established  by  order  of  the  Director  General  of  Rail- 
roads in  January,  1918,  to  investigate  compensation  of 
railway  employees  and  to  make  recommendations.  Later 
a  Board  of  Railroad  Wages  and  Working  Conditions  was 
created,  to  investigate  problems  of  wages  and  other  con- 
ditions of  employment  referred  to  it  by  the  director.  A 
Division  of  Labor  was  established  in  February,  1918. 
Three  railway  boards  of  adjustment  were  established 
later:  "Board  of  Adjustment  No.  1"  considered  all  con- 
troversies involving  conductors,  engineers,  trainmen,  fire- 
men, and  enginemen;  "Board  of  Adjustment  No.  2"  dealt 
with  grievances  affecting  workers  in  mechanical  depart- 
ments; and  "Board  of  Adjustment  No.  3"  had  jurisdic- 
tion over  cases  involving  telegraphers,  switchmen,  clerks, 
and  maintenance-of-way  men.  The  question  of  wage  rates 
and  hours  was  usually  left  to  the  Railroad  Wage  Com- 
mission, but  matters  of  dispute  arising  from  interpretation 
of  wage  agreements,  not  including  matters  passed  upon 
by  the  commission,  were  decided  by  the  adjustment 
boards.  Personal  grievances  and  controversies  arising 
under  interpretation  of  wage  agreements,  and  all  other 
disputes  between  management  and  employees  which  could 
not  be  adjusted  by  local  subdivisions  of  the  boards  were 
submitted  to  the  Director  of  the  Division  of  Labor,  who  in 
turn  referred  the  case  to  the  appropriate  railway  adjust- 
ment board  for  consideration  and  award. 

The  railroads  were  returned  to  private  ownership  on 
March  1,  1920,  under  the  authority  of  the  Transportation 
Act,  approved  February  29,  1920,  which  also  provided  for 
railway  boards  of  labor  adjustment  and  a  railroad  Idbor 
board.  The  carriers  and  their  employees  are  required  to 
exert  every  effort  to  settle  their  difficulties  in  joint  con- 
ference. Disputes  involving  only  grievances,  rules,  or 
working  conditions  not  adjusted  in  joint  conference  are 
considered  by  the  railroad  board  of  adjustment  author- 
ized to  perform  this  service.  Railroad  boards  of  labor 
adjustment  are  created  by  agreement  between  any  car- 
rier, group  of  carriers,  or  the  carriers  as  a  whole,  and 


The  Adjustment  of  Industrial  Disputes     423 

their  employees.  Controversies  threatening  an  inter- 
ruption of  interstate  commerce  may  be  referred  to  these 
boards:  (1)  upon  application  by  the  carrier  or  organized 
workers  involved;  (2)  upon  written  petition  of  no  less 
than  100  unorganized  employees;  (3)  upon  motion  of  the 
adjustment  board  itself;  or  (4)  upon  request  of  the  Bail- 
road  Labor  Board. 

The  Railroad  Labor  Board  constitutes  a  court  of  final 
appeal  and  adjustment  in  railroad  labor  disputes.  It 
consists  of  nine  members,  with  equal  representation  of 
employers,  employees,  and  the  public,  all  appointed  by  the 
President  with  the  consent  of  the  Senate.  The  repre- 
sentatives of  employers  and  employees  are  chosen  from 
not  less  than  six  persons  nominated  by  each  of  these  in- 
terests. During  their  term  of  office,  which  is  five  years, 
members  of  this  board  cannot  hold  stocks  or  bonds  of  any 
carrier  nor  be  active  members  or  officers  of  labor  organ- 
izations. The  board  is  empowered  to  hear  disputes 
directly  or  on  appeal  from  the  adjustment  boards.  Its 
decisions  are  reached  by  majority  vote,  except  that  in 
controversies  referred  directly  to  it  one  of  the  repre- 
sentatives of  the  public  must  concur  in  the  decision.  Its 
decisions  are  not  binding,  but  the  board  may  determine 
whether  its  awards  are  complied  with  and  publish  its 
decisions.  Wage  and  salary  rates  determined  by  the  joint 
conference  of  carriers  and  employees  may  be  suspended 
by  the  board  if  they  are  likely  to  necessitate  readjustment 
in  the  rates  of  any  roads,  but  a  final  affirmation  or  modifi- 
cation of  the  suspended  rates  must  be  made  by  the  board. 
In  making  investigations  the  board  may  subpena  wit- 
nesses  and  has  access  to  records  requisite  to  a  complete 
inquiry.  One  of  its  first  acts  was  to  add  $600,000,000  to 
the  annual  pay  of  railway  workers,  effective  July  1,  1920. 
Its  next  wage  decision,  effective  July  1,  1921,  subtracted 
more  than  $300,000,000  of  the  increase.  When  the  board 
entered  the  third  year  of  its  existence,  on  April  17,  1922, 
it  had  rendered  wage  decisions  involving  $1,000,000,000, 
and  adjusted  numerous  grievances  and  disputes.  Later  in 
1922  the  board  ordered  wage  reductions  aggregating  over 


424     The  Adjustment  of  Industrial  Disputes 

$134,000,000.  Several  serious  strikes  have  occurred  dur- 
ing the  existence  of  the  board.  Railroad  companies  and 
railroad  unions  have  often  defied  the  board  and  disre- 
garded its  decisions,  but  the  government  has  supported 
the  board's  actions.  The  Board  of  Mediation  and  Con- 
ciliation created  by  the  Newlands  Act  is  not  abolished 
by  the  act  of  1920,  but  its  powers  and  duties  are  not  ex- 
tended to  any  dispute  referred  to  any  adjustment  board 
or  the  labor  board  established  under  the  new  law. 

The  Act  of  March  4,  1913,  creating  a  Department  of 
Labor,  provides  that  the  Secretary  of  Labor  shall  have 
power  to  act  as  mediator  and  to  appoint  commissioners 
of  conciliation  in  labor  disputes,  whenever,  in  his  judg- 
ment, the  interests  of  industrial  peace  may  so  require. 
The  function  of  the  mediation  service  of  the  Department 
of  Labor  is  diplomatic  rather  than  judicial.  Its  powers 
are  in  no  sense  mandatory  nor  is  any  disputant  required 
to  accept  its  good  offices.  Between  1913  and  1921  it  con- 
sidered nearly  5,000  cases  of  which  more  than  3,500,  or 
70  per  cent,  were  adjusted. 

The  period  of  the  World  War  was  one  of  unprecedented 
industrial  unrest,  owing  to  the  abnormal  inflation  of 
prices  and  the  failure  of  wages  to  keep  pace  with  the  price 
level.  The  President's  Mediation  Commission  was  ap- 
pointed in  September,  1917,  to  investigate  labor  unrest 
in  the  western  states,  and  to  effect  amicable  adjustments. 
In  a  period  of  five  weeks  the  commission  disposed  of  two 
hundred  and  fifty  disturbances  and  continued  its  efforts 
with  equal  success.  Among  the  recommendations  of  the 
commission  were:  (1)  guaranty  of  some  form  of  col- 
lective bargaining;  (2)  creation  of  agencies  for  adjusting 
disputes;  (3)  adoption  of  the  basic  eight-hour  day;  (4) 
surrender  of  all  practices  conducive  to  limitation  of  out- 
put; and  (5)  a  unified  national  labor  administration. 

The  National  War  Labor  Board  (1918-1919)  had  its 
inception  in  the  recommendations  of  the  War  Labor  Con- 
ference Board,  a  body  representing  the  public,  employers, 
and  employees.  The  National  War  Labor  Board  consisted 
of  joint  chairmen  representing  the  public,  chosen  re- 


The  Adjustment  of  Industrial  Disputes    425 

spectively  by  national  associations  of  employers  and 
employees,  and  five  representatives  each  of  these  two 
groups.  The  principles  governing  its  adjustments  in- 
cluded: abandonment  of  strikes  and  lockouts  during  the 
war;  recognition  of  the  right  of  both  employers  and  em- 
ployees to  bargain  collectively;  adjustment  of  disputes 
by  mediation  and  conciliation ;  creation  of  machinery  for 
local  adjustment  of  controversies  whenever  possible ;  pro- 
vision of  an  umpire  when  the  national  board  failed  to 
effect  a  settlement ;  maintenance  of  maximum  production ; 
equal  pay  for  equal  work  when  women  are  employed  at 
the  same  tasks  as  men;  determination  of  wages,  hours, 
and  conditions  of  employment  in  accordance  with  the 
prevailing  standards  in  the  locality  of  the  plant;  and 
recognition  of  the  right  of  all  workers  to  a  living  wage. 
The  board  was  nonstatutory  in  its  character,  and  its 
decisions  were  not  enforceable  at  law.  Employers  and 
employees  were  encouraged  to  make  their  own  law  and 
appoint  their  own  judges.  Although  public  opinion  and 
patriotic  motives  were  relied  on  to  enforce  its  awards, 
there  were  only  three  occasions  when  they  were  not  will- 
ingly accepted  and  applied.  By  the  middle  of  February, 
1919,  the  number  of  decisions  announced  totaled  198,  in- 
volving 34  industries  scattered  over  35  states.  The  num- 
ber of  cases  that  had  been  docketed  up  to  April  15,  1919, 
aggregated  1,244,  only  33  of  which  had  not  been  disposed 
of  in  some  way.  Other  important  attempts  of  the  federal 
government  to  settle  industrial  disputes  include  the 
Anthracite  Coal  Strike  Commission  of  1902,  the  United 
States  Bituminous  Coal  Commission  of  1919-1920,  and 
the  Anthracite  Coal  Commission  of  1920.  A  similar  com- 
mission was  suggested  for  the  adjustment  of  the  joint 
anthracite  and  bituminous  coal  strike  in  1922,  which 
involved  between  500,000  and  600,000  miners. 

State  Legislation. — Convinced  that  controversies  be- 
tween employers  and  employees  should  be  settled  in  a 
peaceable  manner,  the  majority  of  American  states  have 
enacted  legislation  designed  to  carry  out  this  purpose. 
In  the  decade  of  the  eighties  thirteen  states  passed  laws 


426     The  Adjustment  of  Industrial  Disputes 

providing  agencies  of  adjustment,  and  within  the  next  ten 
years  the  total  number  increased  to  twenty-three.  This 
early  movement  was  started  by  the  enactment  of  a  law  in 
Maryland  in  1878,  and  in  New  Jersey  in  1880.  By  1915 
no  less  than  thirty-two  states  had  placed  upon  their 
statute  books  laws  dealing  with  conciliation  and  arbitra- 
tion, and  at  the  present  time  practically  every  state  has 
enacted  similar  legislation.  These  various  laws  fall  into 
four  groups:  (1)  local  arbitration,  with  temporary  boards 
of  adjustment;  (2)  permanent  local,  county,  or  district 
boards  established  by  private  parties;  (3)  mediation  and 
arbitration  by  state  commissioners  of  labor;  and  (4) 
special  state  boards  or  commissions  of  mediation  and 
arbitration.  The  first  two  of  these  groups  of  laws  have 
proved  of  little  value  in  securing  industrial  peace,  and 
the  third  type  has  been  insufficiently  successful  to  wer- 
rant  its  application  in  many  states.  By  far  the  best  work 
has  been  accomplished  by  state  boards  or  commissions  of 
mediation  and  arbitration. 

Twenty  or  more  states  have  permanent  boards  of  medi- 
ation and  arbitration.  Direct  representation  of  employers 
and  employees  is  provided  for  in  many  of  these  statutes, 
appointment  being  vested  in  the  governor,  with  the  con- 
sent of  the  senate.  In  more  than  a  score  of  states  com- 
pulsory investigation  is  required,  while  in  several  others 
investigation  is  left  to  the  discretion  of  the  parties  to  the 
controversy.  Considerable  variation  exists  as  to  the  con- 
ditions under  which  investigations  may  be  initiated.  In 
about  a  dozen  states  it  is  provided  that  the  award  shall 
be  enforced  when  arbitration  has  been  mutually  agreed 
upon  by  the  parties  involved  in  the  dispute.  Punishment 
is  provided  in  cases  of  contempt,  and  imprisonment  for 
wilful  disobedience  of  orders.  Mediation  and  voluntary 
arbitration  without  coercive  measures  have  proved  suc- 
cessful in  many  jurisdictions.  In  about  twenty  states 
voluntary  arbitration  is  conditioned  upon  an  agreement 
to  refrain  from  strikes  and  lockouts  during  the  proceed- 
ings. The  success  of  these  laws  has  been  appreciable  in 
industrial  states  as  New  York,  Ohio,  Massachusetts,  and 


The  Adjustment  of  Industrial  Disputes    427 

Illinois,  while  in  other  states  little  use  has  been  made  of 
statutory  boards  of  mediation  and  arbitration  on  account 
of  the  fact  that  submissions  may  be  had  only  upon  consent 
of  the  parties  directly  involved.  In  Minnesota,  for  ex- 
ample, the  law  creating  such  a  board  was  passed  in  1895, 
but  in  only  a  few  cases  were  its  provisions  applied  until 
1918. 

No  state  statutes  for  the  adjustment  of  industrial  dis- 
putes have  attracted  more  attention  than  the  Colorado 
Industrial  Commission  Act  of  1915  and  the  Kansas  Court 
of  Industrial  Relations  Act  of  1920.  The  Colorado  Act  is 
modeled  after  the  Canadian  Industrial  Disputes  Act  of 
1907.  Under  the  Colorado  act  it  is  unlawful  for  em- 
ployers to  declare  or  cause  a  lockout  or  for  employees  to 
go  on  strike  prior  to  or  during  an  investigation  or  arbitra- 
tion of  a  dispute.  Under  the  provisions  of  the  law  the 
Industrial  Commission  has  power  to  compel  a  hearing  on 
industrial  controversies  and  to  make  an  award.  The 
award  is  not  mandatory.  Changes  in  the  terms  of  em- 
ployment, strikes,  and  lockouts  are  forbidden  until  thirty 
days'  notice  has  been  served  and  until  after  a  hearing 
and  an  award,  provided  proceedings  are  begun  within  the 
period  of  the  notice.  The  act  applies  to  all  employees 
except  those  in  domestic  service,  agriculture,  and  estab- 
lishments employing  less  than  four  hands.  Although  the 
requirement  of  thirty  days'  notice  has  been  severely  criti- 
cized, it  affords  an  opportunity  for  conciliatory  action. 
Informal  conferences  are  provided  for,  but  if  these  fail 
the  Industrial  Commission  conducts  formal  hearings  and 
makes  awards.  The  commission  reports  that  the  results 
have  amply  justified  the  existence  of  the  act.  The  law  is 
recognized  as  a  step  towards  industrial  peace,  but  organ- 
ised labor  contends  that  on  several  occasions,  notably  in 
the  reduction  of  miners'  wages  in  1921,  such  corporations 
as  the  Colorado  Fuel  and  Iron  Company  have  illegally 
changed  conditions  of  employment  and  have  been  sus- 
tained by  the  state  commission. 

The  Industrial  Relations  Court  of  Kansas,  provided  for 
in  an  act  of  the  General  Assembly  in  1920,  has  attracted 


428     The  Adjustment  of  Industrial  Disputes 

general  attention.  The  Court  of  Industrial  Relations  con- 
sists of  three  judges  appointed  by  the  governor,  with  the 
advice  and  consent  of  the  senate,  each  to  serve  for  a  term 
of  three  years.  The  purpose  of  the  court  is  to  preserve 
the  public  peace ;  protect  the  public  health ;  prevent  indus- 
trial strife,  disorder,  and  waste;  secure  regular  and  or- 
derly conduct  of  businesses  directly  affecting  the  living 
of  the  people ;  and  promote  the  general  welfare.  Although 
the  court  was  given  powers  previously  held  by  the  State 
Public  Utilities  Commission,  which  it  superseded,  its  most 
important  provisions,  for  our  purposes,  have  to  do  with 
the  regulation  of  certain  industries  and  occupations  that 
are  affected  with  a  public  interest.  These  industries  in- 
clude the  manufacture  of  food  products  and  clothing  and 
processes  connected  therewith ;  the  mining  and  production 
of  fuel;  transportation,  and  all  public  utilities  and  com- 
mon carriers  as  defined  by  existing  statutes  of  the  state. 
Continuity  and  efficiency  in  the  operation  of  these  indus- 
tries are  deemed  fundamental  to  the  public  welfare.  In 
serious  controversies  the  court  may  make  an  investigation 
on  its  own  motion,  or  upon  the  complaint  of  either  party 
to  the  dispute,  of  ten  citizen  taxpayers  of  the  community 
involved,  or  of  the  attorney  general  of  the  state.  Such 
an  investigation  may  extend  to  the  conditions  of  labor, 
wages,  returns  to  capital,  and  the  rights  and  welfare  of 
the  public.  Future  conditions  of  the  industry  are  to  be 
determined  by  the  court,  and  an  order  may  be  issued 
making  any  necessary  changes  in  conditions  of  work, 
living  conditions,  hours  of  labor,  rules,  and  practices,  or 
establishing  a  reasonable  minimum  wage  or  standard  of 
wages.  Appeal  from  its  decisions  may  be  had  within  ten 
days.  If,  after  sixty  days'  compliance  with  the  order, 
either  party  to  the  dispute  finds  it  to  be  unjust,  unreason- 
able, or  impracticable,  the  aggrieved  party  may  apply  for 
a  modification,  whereupon  the  court  is  required  to  hold 
a  hearing  and  make  such  modifications  as  seem  necessary. 
The  Industrial  Court  may  bring  suit  in  the  State 
Supreme  Court  to  compel  compliance  with  its  orders.  A 
fine  not  exceeding  $100  or  imprisonment  not  exceeding 


The  Adjustment  of  Industrial  Disputes    429 

one  year,  or  both,  may  be  imposed  on  persons  willfully  vio- 
lating the  provisions  of  the  act  or  any  valid  order  of  the 
court,  while  a  fine  not  exceeding  $5,000  or  imprisonment 
at  hard  labor  not  exceeding  two  years,  or  both,  may  be 
imposed  on  officers  of  corporations  or  labor  unions  guilty 
of  violation.  Alexander  Howat  and  August  Dorchy, 
miners'  leaders,  have  been  imprisoned  under  these  pro- 
visions. The  court  may  take  over  and  operate  industries 
or  work  affected  by  a  dispute,  in  case  production  and 
operation  are  suspended,  but  a  fair  return  to  the  owners 
and  employees  is  guaranteed.  The  right  to  organize  and 
bargain  collectively  is  recognized  under  the  law,  but 
strikes,  lockouts,  picketing,  boycotting,  and  other  weap- 
ons of  industrial  warfare  are  prohibited.  Employees  are 
protected  in  their  freedom  to  quit  work  individually  in 
termination  of  a  contract,  and  are  safeguarded  against 
discharge  for  appearing  before  the  court  with  complaint. 
Employers  and  employees  not  in  industries  covered  by 
the  act  may  submit  their  disputes  to  the  court.  The 
establishment  of  a  minimum  wage  for  men  is  a  new  de- 
parture in  this  country. 

The  court's  functions  are  administrative  rather  than 
judicial.  In  1921  the  legislature  widened  the  scope  of  the 
act  by  abolishing  the  Industrial  Welfare  Commission  and 
the  Department  of  Labor  as  separate  agencies,  and  con- 
solidating these  with  the  Court  of  Industrial  Relations. 
The  court  is  apparently  burdened  with  too  many  func- 
tions. Industrial  welfare,  the  numerous  activities  of  the 
department  of  labor,  regulation  of  public  utilities,  and 
arbitration  are  very  comprehensive  duties  for  one  body 
to  perform,  and  may  result  in  the  failure  of  this  interest- 
ing experiment.  The  industrial  court  law  has  been  de- 
clared constitutional  by  the  State  Supreme  Court,  but  has 
yet  to  be  ruled  upon  by  the  United  States  Supreme  Court. 

Opinion  concerning  the  success  of  the  court  is  divided 
and  evidence  is  conflicting.  Strikes  have  not  been 
stopped,  but  there  is  reason  to  believe  that  their  number 
has  decreased.  Permanent  success  of  the  law,  however,  is 
hardly  probable  unless  the  present  opposition  of  organ- 


430    The  Adjustment  of  Industrial  Disputes 

ized  labor  and  of  certain  employing  groups  diminishes. 
Following  the  enactment  of  the  Kansas  law,  similar 
measures  were  introduced  in  several  states,  apparently 
without  success.  In  Nebraska,  however,  a  constitutional 
provision  in  1920,  authorizes  the  establishment  of  an 
agency  similar  in  scope  and  power  to  the  Kansas  court. 

Legislation  in  Other  Countries.  1.  The  United  Kingdom. 
— Many  laws  have  been  passed  in  Great  Britain  for  the 
purpose  of  facilitating  the  settlement  of  industrial  dis- 
putes. Early  laws  sought  to  maintain  industrial  peace  by 
fixing  wages  and  providing  other  adjustments.  Later 
measures  aimed  more  definitely  at  conciliation  and  arbi- 
tration. The  Arbitration  Act  of  1824  authorized  the 
appointment  by  justices  of  the  peace  of  arbitrators  in 
labor  disputes,  and  gave  them  extensive  arbitrary  powers. 
The  Lord  St.  Leonard's  Act  of  1867,  which  confirmed  the 
act  of  1824,  provided  for  councils  of  conciliation  and  arbi- 
tration. The  Arbitration  Act  of  1872  introduced  more 
comprehensive  machinery  for  the  selection  of  arbitrators 
and  arbitration  boards,  but  did  not  change  the  arbitrary 
provisions  of  previous  legislation.  These  attempts  were 
not  very  effective.  In  1896  the  Conciliation  Act  was 
passed  for  the  "prevention  and  settlement  of  trade  dis- 
putes." Its  most  important  feature  was  the  authorization 
of  the  Board  of  Trade  as  a  standing  agency  of  mediation, 
whose  services  were  rendered  only  upon  application  by 
either  party  to  a  dispute.  In  1908  a  permanent  court  of  arbi- 
tration was  added,  and  in  1911  a  new  body,  known  as  the 
Industrial  Council,  was  created.  These  measures  defi- 
nitely aimed  to  secure  representation  for  employers,  em- 
ployees, and  the  public  in  the  adjustment  of  disputes. 
Voluntary  arbitration  was  the  fundamental  objective. 
Conciliation  boards,  consisting  of  representatives  of  em- 
ployers' associations  and  labor  organizations,  were  the 
chief  agencies  of  adjustment  in  the  industries  of  the 
country  in  the  years  following. 

The  normal  position  of  the  British  government  with 
regard  to  the  adjustment  of  labor  disputes  is  defined  in 
the  Industrial  Courts  Act  of  November  20,  1919,  embody- 


The  Adjustment  of  Industrial  Disputes    431 

ing  the  recommendations  of  the  committee  on  relations 
between  employer  and  employed  (the  Whitley  committee) 
on  the  subject  of  conciliation  and  arbitration.  The  law 
gives  statutory  effect  to  the  government's  declared  policy 
of  encouraging  employers  and  employees  to  settle  their 
own  disputes  rather  than  resort  to  government  interven- 
tion. The  interim  court  of  arbitration  established  under 
the  Wages  (temporary  regulation)  Act  of  1918,  was  so 
successful  that  it  seemed  advisable  to  form  a  permanent 
body  to  which  industrial  disputes  could  be  referred  for 
adjustment.  The  Industrial  Courts  Act  of  1919  was  the 
result.  The  main  provisions  of  the  act  are:  (1)  A  dispute 
shall  not  be  referred  to  arbitration  until  the  conciliation 
procedure  existing  in  the  trade  is  exhausted;  (2)  a  per- 
manent court  of  arbitration  is  established,  consisting  of 
persons  appointed  by  the  Minister  of  Labor  for  the  pur- 
pose of  settling  trade  disputes  upon  consent  of  both  par- 
ties concerned;  and  (3)  courts  of  inquiry  are  established, 
which  shall  make  immediate  investigation  of  any  existing 
or  apprehended  dispute  and  give  to  the  public  an  impar- 
tial report  of  its  merits.  In  accordance  with  traditional 
British  policy,  arbitration  under  the  act  is  purely  volun- 
tary. The  machinery  of  arbitration  is  to  be  used  in 
emergencies  arising  from  the  failure  of  employers  and 
employees  to  adjust  their  differences.  In  deference  to  the 
wishes  of  organized  labor  no  antistrike  clause  was  in- 
serted in  the  act,  so  that  prevention  rather  than  prohibi- 
tions of  strikes  is  desired. 

A  court  of  inquiry  may  consist  of  one  person  or  of  a 
chairman  and  several  persons  appointed  by  the  Minister 
of  Labor.  The  court  may  call  for  all  documents  and  com- 
pel the  attendance  of  witnesses  in  securing  information 
concerning  a  dispute,  but  it  cannot  publish  information 
thus  solicited  "which  is  not  available  otherwise  than 
through  evidence  given  at  the  inquiry,  except  with  the 
consent  of  the  secretary  of  the  trade  union  or  of  the  per- 
non,  firm,  or  company  in  question,  nor  shall  any  individual 
member  of  the  court  or  any  person  concerned  in  the 
inquiry,  without  such  consent,  disclose  any  such  informa- 


432     The  Adjustment  of  Industrial  Disputes 

tion."  The  personnel  of  the  Industrial  Court  must  con- 
sist of  representatives  of  the  public,  employers,  and 
employees,  the  length  of  office  of  its  members  being 
determined  by  the  Minister  of  Labor.  The  court  normally 
sits  in  London,  but  hearings  may  also  take  place  in  other 
industrial  centers,  and  individual  members  may  hear  cases 
in  less  important  localities  where  emergencies  arise.  The 
Ministry  of  Labor  has  been  very  successful  in  adjusting 
industrial  controversies  under  the  provisions  of  the  Con- 
ciliation Act  of  1896,  the  Coal  Mines  (minimum  wage) 
Act  of  1912,  the  Wages  Acts  of  1918  and  1919,  the  Res- 
toration of  Prewar  Practices  Act  of  1919,  and  the  Indus- 
trial Courts  Act  of  1919. 

2.  Australasia. — For  many  years  Australasian  countries 
have  had  a  policy  of  adjusting  labor  controversies  either 
by  means  of  courts  of  arbitration  or  of  wage  boards. 
While  wage  boards  were  introduced  primarily  to  eradi- 
cate the  sweating  system  by  prescribing  minimum  wage 
scales,  they  have  promoted  industrial  peace.  As  in  the 
United  States,  serious  industrial  strikes  resulted  in 
statutes  designed  to  prevent  cessations  of  work.  The 
maritime  strike  of  1890  injured  the  industrial  life  of  New 
Zealand  because  of  the  country's  dependence  upon  unin- 
terrupted maritime  transportation.  Strikes  became  so 
great  an  evil  that  New  Zealand,  in  1894,  passed  a  com- 
pulsory arbitration  act. 

Under  the  authority  of  the  New  Zealand  act  of  1894 
district  boards  of  conciliation  and  a  court  of  arbitration 
were  created.  The  boards  of  conciliation  comprise  an 
equal  number  of  representatives  of  employers  and  of  em- 
ployees, selected  from  persons  nominated  by  registered 
unions  of  these  two  groups.  Under  the  original  provisions, 
an  impartial  chairman  was  chosen  by  these  representatives, 
but  since  1908  commissioners  of  conciliation,  who  are  sal- 
aried officials,  have  been  appointed.  The  commissioner  in 
each  district  serves  for  three  years ;  he  receives  petitions  for 
adjustment  and  appoints  advisers  from  persons  of  indus- 
trial experience  nominated  by  employers  and  employees. 

The  Court  of  Arbitration  of  New  Zealand,  which  has 


The  Adjustment  of  Industrial  Disputes    433 

jurisdiction  over  the  entire  colony,  consists  of  three  mem- 
bers appointed  by  the  governor.  One  of  these  members  is 
chosen  from  a  list  submitted  by  registered  trade  unions, 
one  from  nominations  made  by  registered  associations  of 
employers,  and  the  third,  the  president  of  the  court,  from 
the  justices  of  the  Supreme  Court.  Registration  is  purely 
voluntary.  Strikes  are  illegal  for  registered  unions,  but 
not  for  unregistered  unions.  The  machinery  of  concilia- 
tion or  arbitration  may  be  set  in  motion  upon  application 
of  either  party  to  the  controversy.  The  Court  of  Arbitra- 
tion possesses  powers  of  compulsory  investigation  and 
may  compel  the  attendance  of  witnesses,  the  submission 
of  documentary  evidence,  and  other  information  affecting 
the  controversy.  Awards  may  be  made  applicable  to  the 
entire  industry.  Competitive  conditions  in  a  given  indus- 
try are  thus  equalized,  and  protection  is  afforded  regis- 
tered employers  and  employees  from  destructive  competi- 
tion by  those  who  are  not  registered. 

Unless  unions  cancel  their  registration,  the  decisions, 
agreements,  and  awards  made  under  the  act  remain  in 
force  until  superseded  by  new  agreements  or  awards. 
The  award  continues  for  three  years  even  though  cancel- 
lation of  registration  takes  place.  Where  unions  have 
strong  organization  prior  to  the  dispute  the  court  usually 
gives  preference  to  the  unions,  and  an  employer  is  re- 
quired to  discharge  a  nonunion  man  in  favor  of  an  unem- 
ployed union  man.  Although  New  Zealand  has  not 
achieved  industrial  peace,  there  is  a  general  disposition  on 
the  part  of  all  political  parties,  except  socialists  and 
syndicalists,  to  accept  the  principle  of  compulsory  arbi- 
tration. Much  difficulty  is  experienced  in  enforcing 
penalties  for  illegal  strikes  and  lockouts,  and  nonregis- 
tered  unions  oppose  the  Court  of  Arbitration. 

Other  Australasian  states  have  made  definite  provisions 
for  the  adjustment  of  industrial  disputes.  In  1896 
Victoria  passed  a  minimum  wage  law,  which  established 
wage  boards  for  immediate  adjustment  of  industrial 
grievances  and  determination  of  wage  scales  in  low-paid 
industries.  The  right  to  strike  is  not  denied,  but  the 


434     The  Adjustment  of  Industrial  Disputes 

machinery  of  adjustment  works  with  such  facility  that 
strikes  are  infrequent.  New  South  "Wales  passed  a  volun- 
tary arbitration  act  in  1892  which  was  unsuccessful.  In 
1901  a  compulsory  arbitration  law  was  enacted,  author- 
izing a  court  of  arbitration  with  extensive  powers.  Be- 
cause the  court  did  not  function  with  sufficient  facility, 
an  act  was  passed  in  1908  establishing  a  system  of  wage 
boards  patterned  after  the  Victorian  plan,  with  provisions 
for  appeal  to  a  special  court  of  arbitration.  All  strikes 
were  declared  illegal,  fines  were  provided  for  violation 
and,  later,  imprisonment  not  exceeding  twelve  months. 
The  strike  movement  was  accelerated  by  these  provisions, 
and  in  1912  a  new  compulsory  arbitration  law  was  passed 
which  discontinued  the  penalties  and  created  conciliation 
boards  for  mine  workers.  Compulsory  arbitration  was 
adopted  by  Western  Australia  in  1902,  by  the  Common- 
wealth of  Australia  in  1904,  and  by  South  Australia  and 
Queensland  in  1912.  In  general  it  may  be  said  that  the 
Australasian  countries  have  recognized  the  fundamental 
principles  of  compulsory  arbitration,  but  the  evidence 
indicates  a  growing  opposition  on  the  part  of  labor  organ- 
izations. 

3.  Canada. — The  Canadian  Industrial  Disputes  Act  of 
1907  applies  to  all  public  utilities  and  mines.  The  ex- 
tended strike  in  the  Alberta  coal  mines  during  1906  was  a 
prominent  cause  of  the  enactment  of  this  statute.  In  the 
industries  specified,  it  is  unlawful  for  employers  to  lock 
out  their  workmen  or  for  the  employees  to  strike  until  the 
causes  of  the  dispute  have  been  investigated  by  a  govern- 
ment board  appointed  for  this  purpose,  and  the  findings 
of  the  board  published.  Following  these  proceedings 
either  party  may  refuse  to  accept  the  findings  and  initiate 
a  strike  or  lockout.  Postponement  rather  than  prohibi- 
tion of  strikes  and  lockouts  is  the  purpose  of  the  act.  The 
act  recognizes  the  right  of  the  public  to  know  why  inter- 
ruption occurs  in  basic  industries. 

Any  change  affecting  hours  and  wages  in  the  industries 
specified,  whether  upon  demand  of  employers  or  em- 
ployees, must  be  preceded  by  thirty  days'  notice.  Either 


Tlie  Adjustment  of  Industrial  Disputes    435 

party  to  a  controversy  which  threatens  to  culminate  in  a 
strike  or  lockout  may  apply  to  the  Dominion  Department 
of  Labor  for  a  board  of  conciliation  and  investigation. 
Applications  must  be  accompanied  by  statements  setting 
forth  the  particulars  of  the  controversy.  Upon  receipt  of 
the  application,  the  Minister  of  Labor  appoints  a  board 
of  three  members,  one  nominated  by  the  employers,  one 
by  the  employees,  and  a  chairman  selected  either  by  these 
two  or,  if  they  fail  to  agree,  by  the  government.  If  either 
side  fails  to  nominate  its  representative  the  Minister  of 
Labor  makes  the  selection.  Informal  conferences  par- 
ticipated in  by  representatives  of  employers,  employees, 
and  the  public  have  proved  the  most  successful  procedure 
in  conducting  investigations.  Majority  and  minority 
reports,  setting  forth  the  conditions  underlying  the  dis- 
pute and  suggesting  terms  of  settlement,  are  published 
by  the  government.  If  the  terms  are  unacceptable,  either 
party  to  the  dispute  may  resort  to  ordinary  methods  of 
industrial  warfare. 

Fines  are  imposed  for  strikes  and  lockouts  begun  prior 
to  the  publication  of  the  findings  of  the  board  of  investi- 
gation. Fear  of  penalties  seems  to  have  had  little  influ- 
ence in  preventing  violations.  A  study  of  its  operation 
shows  that  "whatever  success  has  attended  the  admin- 
istration of  the  act  has  been  due  to  the  conciliatory  efforts 
of  the  Department  of  Labor  through  its  fair  wage  officers 
and  its  boards  of  conciliation  and  investigation ;  to  the 
dislike  for  publicity  rather  than  to  the  fear  of  fine  or 
imprisonment^  to  the  existence  of  a  means  of  negotiation 
rather  than  a  means  of  restriction."1  During  the  period 
March  22,  11)07,  to  December  31,  1916,  there  were  eleven 
prosecutions  and  the  aggregate  of  fines  imposed,  ex- 
clusive of  costs,  was  $1,660.  In  the  same  period  there  were 
204  illegal  strikes  and  lockouts  affecting  80,278  employees 
whose  time  loss  was  3,015,844  days.  If  the  minmum 
penalty  of  $10  a  day  for  each  striking  employee  had  been 
imposed,  the  total  fines  would  have  amounted  to 
$30,000,000,  while  if  the  maximum  penalty  of  $50  had 

1  Monthly  Labor  Review,  September,  1917,  p.  11. 


436     The  Adjustment  of  Industrial  Disputes 

been  imposed  the  total  would  have  been  in  excess  of 
$150,000,000.  In  1911  the  time  loss  due  to  strikes  in 
Canada  exceeded  2,000,000  working-days.  In  1918  the 
number  of  strikes  and  lockouts  was  196,  the  highest  figure 
in  a  period  of  eighteen  years;  while  in  1919  the  number 
was  298,  involving  138,988  persons  and  a  time  loss  of 
approximately  4,000,000  working-days.  The  general 
strike  in  Winnipeg  in  1919  involved  over  40,000  persons 
and  a  time  loss  of  1,154,000  working-days.  In  the  same 
year  strikes  in  the  coal  mines  of  Alberta  and  southern 
British  Columbia  entailed  a  loss  of  462,879  days.  The  loss 
to  producers  in  Canada  resulting  from  strikes  in  1919  is 
estimated  at  $108,000,000.  In  1920  there  were  285  strikes 
and  lockouts  in  mines  and  other  industries.2  It  would 
seem,  therefore,  that  the  coercive  features  of  the  law  have 
not  been  applied  successfully,  and  that  in  effect  the  result 
has  been  voluntary  conciliation.  The  law  has  been  effec- 
tive in  railway  disputes  chiefly  because  railway  employees 
appear  to  favor  its  provisions.  Among  the  miners'  and 
radical  workers'  organizations  there  is  considerable  op- 
position. 

Advantages  and  Disadvantages  of  Mediation  and  Arbi- 
tration. —  In  no  country  have  mediation,  compulsory 
investigation,  and  arbitration  been  an  unqualified  success. 
Strikes  and  lockouts  are  still  generally  resorted  to  in 
industrial  disputes.  Such  measures,  however,  have  made 
a  significant  contribution  to  the  movement  for  industrial 
peace.  In  Great  Britain  and  the  United  States  the  most 
successful  method  of  settlement  has  been  found  in  con- 
ciliation and  mediation.  Compulsory  investigation  has 
achieved  some  desirable  results  in  Canada  and  Colorado. 
It  is  not  unlikely  that  compulsory  investigation  will  in- 
crease in  importance  if  serious  industrial  conflicts  persist. 
The  case  for  investigation,  conciliation,  and  voluntary 
arbitration  rests  mainly  on  two  facts:  (1)  These  agencies 
eliminate  the  necessity  of  resort  to  methods  of  industrial 
warfare  by  substituting  a  system  of  judicial  procedure 
and  examination;  and  (2)  they  afford  that  measure  of 

'Ibid.,  July,  1921,  p.  24. 


The  Adjustment  of  Industrial  Disputes    437 

publicity  which  is  an  essential  safeguard  to  those  public 
interests  so  frequently  unrecognized  in  joint  conferences 
between  employers  and  employees. 

Compulsory  arbitration  rests  upon  more  debatable 
grounds.  It  is  commonly  believed  that  compulsory  arbi- 
tration functions  chiefly  in  the  interests  of  those  who  con- 
stitute the  dominant  economic  and  political  power.  In 
Australasian  countries  in  which  a  strong  labor  party  often 
is  in  active  control  of  the  government,  and  is  always  a 
powerful  opposition  when  not  actually  in  control,  the 
machinery  of  compulsory  arbitration  is  not  so  likely  to 
prove  disadvantageous  to  the  workers  as  in  countries 
where  no  labor  party  exists  and  political  control  is  uncer- 
tain. In  the  United  States  there  is  no  labor-  party  to 
defend  the  special  rights  of  industrial  workers  or  to  con- 
trol the  machinery  of  law  to  assure  justice  for  them. 
Moreover,  Australian  workers  have  little  or  nothing  to 
fear  from  immigration,  since  its  chief  source  is  the  British 
Isles  and  the  immigrants  have  standards  of  living  com- 
parable to  those  which  prevail  in  the  colonies.  Experi- 
ence with  compulsory  arbitration  abroad,  therefore,  is  no 
guaranty  that  similar  methods  will  succeed  in  the  United 
States. 

Several  important  objections  are  urged  against  com- 
pulsory arbitration.  (1)  Compulsory  arbitration  deprives 
the  workers  of  the  only  means  they  possess  of  making 
effective  their  collective  action — the  strike.  "  Strikes  are 
the  natural  expression  of  the  working  people  against 
injustice,  against  tyranny,  against  a  deterioration  in  thoir 
condition."*  'It  is  objected  that  compulsory  arbitration 
laws  take  away  the  right  to  strike  but  leave  unrestricted 
the  employers'  right  to  discharge,  thus  giving  the  latter  a 
marked  advantage  in  bargaining  power.  (2)  The  preven- 
tion of  strikes  is  practically  impossible,  since  an  indi- 
vidual cannot  be  forced  to  work  against  his  will.  New 
Zealand,  Canada,  Colorado,  and  Kansas  have  not  been 
free  from  strikes.  (3)  The  constitutionality  of  compul- 

' Samuel  Gompers,  "Address  on  the  Kansas  Court  of  Industrial 
Relations,"  p.  18. 


438     The  Adjustment  of  Industrial  Disputes 

sory  arbitration  laws  is  uncertain.  In  basic  industries 
directly  affecting  the  public  welfare  and  safety  such  laws 
would  probably  be  sustained,  but  their  general  applica- 
tion is  viewed  as  undue  interference  with  the  constitu- 
tional guaranty  against  involuntary  servitude.  The  right 
to  organize  and  to  bargain  collectively,  as  well  as  to 
enforce  labor's  demands  with  peaceful  strikes  and  other 
methods,  is  generally  recognized  as  valid,  and  any  contra- 
vention of  that  right  is  difficult  to  justify.  (4)  The  effect 
of  compulsory  arbitration  is  to  weaken  the  power  and 
threaten  the  permanence  of  labor  organizations.  Workers 
are  for  the  most  part  a  practical  group.  Organization  is 
a  means  to  an  end ;  namely,  the  securing  of  higher  wages, 
shorter  hours,  desirable  conditions  of  work,  and  general 
improvement  in  the  standard  of  life.  Workers  will  not 
generally  support  a  movement  that  is  of  no  practical 
benefit  to  them.  Reliance  upon  law  rather  than  organiza- 
tion is  likely  to  be  the  result  of  compulsory  arbitration. 
"The  only  real  effect  is  to  weaken  the  power  and  effec- 
tiveness of  trade  unions;  to  make  wage-earners  dependent 
upon  a  political  agency  to  carry  industrial  problems  into 
politics."4  (5)  Compulsory  arbitration  delegates  author- 
ity to  an  outside  party  who  is  unfamiliar  with  the  condi- 
tions that  cause  the  dispute,  and  frequently  fails  to  ap- 
preciate the  points  at  issue.  The  welfare  of  industry  and 
the  standard  of  life  of  the  workers  are  issues  too  impor- 
tant to  intrust  entirely  to  a  third  party.  (6)  The  decisions 
and  awards  of  arbitrators  are  often  influenced  by  favorit- 
ism and  prejudice.  Workers  claim  that  arbitrators  are 
almost  invariably  men  of  extremely  conservative  points 
of  view,  unable  to  understand  the  progressive  demands  of 
labor.  Employers,  on  the  other  hand,  complain  that  arbi- 
tration boards  frequently  manifest  radicalism  in  granting 
the  demands  of  labor. 

Trade  Agreements. — Trade  agreements  are  entered  into 
by  some  of  the  largest  employers  of  labor  and  the  strong- 
est labor  organizations.  The  railroad  brotherhoods  and 
other  railway  unions  have  agreements  with  the  companies, 

4  Samuel  Gompers,  Labor  and  the  Employer,  p.  270. 


The  Adjustment  of  Industrial  Disputes    439 

and  general  respect  for  these  instruments  obtains  because 
the  railroad  labor  organizations  have  for  a  long  time  con- 
demned the  abrogation  of  agreements  except  on  account 
of  gross  injustice  or  violation  by  the  companies.  About 
a  half  million  coal  miners  have  been  included  in  the 
jointly  determined  agreements.  In  the  central  com- 
petitive field,  for  example,  the  annual  conference  of  an 
equal  number  of  delegates  from  the  operators  and  miners 
constitutes  an  industrial  parliament.  Outside  parties 
have  no  part  either  in  these  proceedings  or  in  adjustment 
of  grievances,  but  the  conference  is  open  to  the  public. 
After  years  of  serious  strife,  a  movement  for  industrial 
peace  in  the  stove  industry  was  originated  in  1891.  The 
Stove  Founders'  National  Defense  Association  and  the 
Iron  Moulders'  Union  of  North  America  entered  into  an 
agreement  to  govern  industrial  relations  to  mutual  ad- 
vantage. At  the  annual  conferences  representatives  of 
both  sides  meet  and  discuss  wages  and  other  conditions  of 
employment.  Provision  is  made  for  the  amicable  settle- 
ment of  disputes  and  differences.  Strikes  and  lockouts 
are  forbidden  pending  a  decision  by  the  joint  committee 
on  adjustment,  which  is  composed  of  an  equal  number  of 
representatives  of  employers  and  employees.  Members  of 
the  employers'  association  who  abrogate  or  violate  the 
agreement  are  dropped  from  membership  and  the  union 
may  then  initiate  a  strike  against  them,  while  members  of 
the  union  violating  the  agreement  are  disciplined  by  the 
national  organization.  Comprehensive  agreements  have 
been  concluded  in  the  clothing  industry,  the  printing 
industry  and  the  building  trades. 

1.  The  Clothing  Industry. — Beginning  with  the  protocol 
of  peace  signed  in  1910  between  the  Cloak,  Suit,  and  Skirt 
Manufacturers'  Protective  Association  and  the  Joint 
Board  of  the  Cloak  and  Skirt  Makers'  Unions  of  New 
York  City,  and  the  Hart,  Schaffner  and  Marx  agreement 
in  Chicago  in  the  same  year,  trade  agreements  have  be- 
come a  common  practice  in  the  clothing  industry  of  the 
United  States.  Prominent  unions  negotiating  agreements 
with  the  various  employers'  associations  include  the 


440     The  Adjustment  of  Industrial  Disputes 

'Amalgamated  Clothing  Workers,  the  United  Garment 
Workers,  the  Ladies'  Garment  Workers,  the  Journeymen 
Tailors'  Union,  and  the  United  Hatters.  Probably  more 
than  60  per  cent  of  the  approximately  600,000  workers  in 
the  various  branches  of  this  industry  are  represented  in 
the  agreements. 

There  are  several  types  of  agreements,  varying  con- 
siderably in  extent  of  union  recognition  and  in  general 
provisions.  The  most  prominent  features  include:  (1) 
the  introduction  of  the  week-work  system  throughout 
the  industry;  (2)  the  preferential  union  shop;  (3)  the 
forty-four  hour  week;  (4)  a  maximum  overtime  of  ten 
hours  per  week  and  then  only  during  busy  seasons;  (5) 
minimum  weekly  rates  of  wages;  (6)  time  and  a  half  for 
overtime  work  to  operators,  finishers,  and  piece  tailors, 
and  double  time  for  overtime  to  other  workers;  (7)  six 
and  a  half  legal  holidays  a  year  (one  half  day  on  Election 
Day)  ;  (8)  prohibition  of  homework,  contracting,  or  sub- 
contracting in  outside  shops;  (9)  registration  of  con- 
tractors; (10)  provision  for  equal  division  of  work  during 
dull  seasons  and  guaranty  of  a  specified  number  of  weeks 
of  employment  in  a  year;  (11)  prohibition  of  strikes  and 
lockouts  during  the  life  of  an  agreement;  (12)  assumption 
of  responsibility  for  contractors  with  regard  to  (a)  em- 
ployment of  not  less  than  ten  operators  per  shop,  (&) 
maintenance  of  all  union  and  sanitary  standards,  and 
(c)  wage  payments  in  case  of  default.  Provision  is  made 
for  the  peaceful  joint  adjustment  of  grievances  by  a  trial 
board  consisting  of  one  representative  from  each  side  and 
an  impartial  person  mutually  satisfactory.  Sometimes 
employers  are  required  to  deposit  a  certain  sum  in  a 
banking  institution  mutually  agreed  upon,  as  a  guaranty 
for  the  faithful  performance  of  the  agreement. 

Some  agreements,  as  those  in  New  York  City,  provide 
for  a  Joint  Board  of  Sanitary  Control  designed  (1)  to 
do  a\vay  with  the  intolerable  conditions  existing  in  some 
of  the  shops  by  bringing  to  bear  upon  them  the  organized 
sentiment  of  both  employers  and  employees,  and  (2)  to 
raise  the  standard  of  sanitary  requirements  throughout 


The  Adjustment  of  Industrial  Disputes    441 

the  entire  industry.  The  board  is  made  up  of  repre- 
sentatives of  employers,  employees,  and  the  public. 

The  judicial  machinery  provided  by  trade  agreements 
in  the  clothing  industry  is  nowhere  better  illustrated  than 
in  the  Hart,  Schaffner  and  Marx  plan  in  Chicago.  An 
agreement  governing  joint  relations  was  made  first  in 
1910  with  the  United  Garment  Workers,  affiliated  with 
the  American  Federation  of  Labor,  but  at  present  the 
agreement  is  with  the  Amalgamated  Clothing  Workers  of 
America,  an  independent  organization.  The  plan  is  the 
result  of  recognition  by  the  company  of  the  close  relation 
between  a  contented  personnel  and  efficiency;  it  is  ex- 
pected that  out  of  such  an  agreement  "will  issue  such  co- 
operation and  goodwill  between  employers,  foremen, 
union,  and  workers  as  will  prevent  misunderstanding  and 
friction  and  make  for  good  team  work,  good  business, 
mutual  advantage,  and  mutual  respect." 

Administration  of  the  Hart,  Schaffner  and  Marx  agree- 
ment is  vested  in  the  Board  of  Arbitration  and  the  Trade 
Board.  The  Board  of  Arbitration  consists  of  three  mem- 
bers, one  chosen  by  the  union,  one  by  the  company,  and  a 
third  who  is  the  mutual  choice  of  these  two.  It  is  the 
duty  of  the  board  to  investigate  and  to  mediate  all  mat- 
ters brought  before  it,  and  it  has  full  and  final  jurisdiction 
over  all  matters  arising  under  the  agreement.  When  a 
grievance  arises  on  the  floor  of  the  shop  it  is  reported  at 
once  by  the  complainant  to  the  union  shop  representative, 
who  presents  it  without  delay  to  the  shop  superintendent. 
These  two  try  to  make  an  adjustment,  but  in  case  they 
fail  the  matter  is  reported  to  the  deputy.  Deputies  are 
chosen  by  employers  and  by  employees  to  represent  them 
in  the  execution  of  the  terms  of  the  agreement.  Deputies 
work  in  cooperation  with  the  Board  of  Arbitration  and 
have  power  to  investigate,  mediate,  and  adjust  com- 
plaints, and  settlements  made  by  them  are  legally  binding 
upon  their  principals,  unless  reversed  by  the  Trade  Board. 
The  Trade  Board  consists  of  eleven  members,  all  of  whom, 
except  the  chairman,  arc  employees  of  the  company.  Five 
members  are  chosen  by  the  company,  and  five  by  the 


442      The  Adjustment  of  Industrial  Disputes 

union,  selected  so  as  to  give  adequate  representation  to  the 
various  departments.  The  chairman  is  chosen  by  the  Board 
of  Arbitration  to  represent  mutual  interests  of  the  parties. 
The  Trade  Board  is  the  primary  agency  for  adjusting 
grievances,  and  has  original  jurisdiction  over  issues  and 
decisions  arising  under  the  agreement.  It  considers 
mainly  fact  and  testimony,  whereas  the  Board  of  Arbitra- 
tion concerns  itself  chiefly  with  questions  of  principle  and 
the  application  of  the  agreement  to  new  issues  as  they 
arise.  Decisions  of  the  Trade  Board  are  by  a  majority 
vote  and  are  presented  to  both  parties  in  writing.  Appeal 
from  these  decisions  may  be  had  to  the  Board  of  Arbitra- 
tion, which  has  final  jurisdiction.  This  agreement  has 
been  applied  very  successfully,  and  the  Amalgamated 
Clothing  Workers  have  negotiated  similar  agreements 
with  other  manufacturers. 

2.  The  Printing  Trades. — A  representative  agreement  in 
the  printing  industry  is  found  in  the  international  arbitra- 
tion agreement  between  the  International  Typographical 
Union  and  the  Closed  Shop  Division  of  the  United 
Typothetae  and  Franklin  Clubs  of  America,  effective 
August  4,  1917,  to  December  31,  1926.  This  agreement 
covers  all  contracts  with  local  unions.  Employers  are 
protected  against  walkouts,  strikes,  and  boycotts,  and 
against  any  other  form  of  concerted  interference  with  the 
regular  operation  of  their  business.  In  the  event  of  a 
dispute  working  conditions  are  to  remain  unchanged 
pending  conciliation  or  arbitration  proceedings.  All  dif- 
ferences not  adjusted  by  local  arbitration  are  submitted 
to  the  chairman  of  the  International  Arbitration  Com- 
mittee of  the  Closed  Shop  Division  and  the  president  of 
the  International  Typographical  Union.  If  these  two 
cannot  adjust  the  matter  it  goes  to  the  International 
Board  of  Arbitration,  which  consists  of  three  members  of 
the  Executive  Council  of  the  International  Typographical 
Union  and  three  members  of  the  International  Arbitration 
Committee  of  the  Closed  Shop  Division.  Failing  to  agree 
after  two  meetings,  the  board,  by  unanimous  vote,  is 
authorized  to  add  a  seventh  member,  who  is  to  be  a  dis- 


The  Adjustment  of  Industrial  Disputes    443 

interested  person.  The  award  of  the  board  is  final  and 
binding  on  all  parties  to  the  agreement. 

3.  The  Building  Trades. — A  typical  agreement  in  the 
building  trades  is  the  uniform  agreement  formulated  in 
1921,  by  the  Joint  Conference  Board  of  the  Building  Con- 
struction Employers'  Association  and  the  Building  Trades 
Council  of  Chicago.  There  are  to  be  no  strikes,  lockouts, 
or  other  stoppage  of  work,  and  both  parties  agree  to  com- 
pel by  lawful  means  compliance  with  the  agreement,  arbi- 
tration awards,  and  working  rules  jointly  determined,  and 
to  suspend  from  membership  in  their  respective  organiza- 
tions any  persons  who  violate  these  instruments.  The 
principles  governing  the  actions  of  the  Joint  Arbitration 
Board  include:  (1)  no  limitation  as  to  the  amount  of 
work  a  man  shall  perform  during  the  working-day;  (2) 
no  restriction  of  the  use  of  machinery,  tools,  or  appli- 
ances; (3)  no  restriction  of  any  raw  materials  or  manu- 
factured materials  except  prison-made;  (4)  no  inter- 
ference with  workmen  during  working  hours;  (5)  no 
prohibition  of  apprentices;  (6)  the  foreman  to  be  the 
agent  of  the  employer;  (7)  workmen  to  be  free  to  work 
for  whomever  they  choose,  under  wage  rates  stipulated  by 
the  Joint  Arbitration  Board. 

The  Joint  Conference  Board  meets  in  January  of  each 
year  to  organize  the  Joint  Arbitration  Board,  which  con- 
sists of  an  equal  number  of  representatives  of  employers 
and  employees.  Persons  not  in  the  trade,  or  persons 
holding  an  elective  or  appointive  public  office  cannot  be 
members  of  the  arbitration  board.  An  umpire  is  also 
chosen  jointly  to  act  for  the  year.  He  must  not  be  affil- 
iated with  the  trade  in  any  way  and  cannot  hold  an 
elective  public  office.  Disputes  and  grievances  between 
journeymen  and  employers  are  referred  to  the  presidents 
of  the  two  organizations  which  are  parties  to  the  agree- 
ment. If  these  persons  fail  to  meet  within  forty-eight 
hours  to  adjust  the  difficulty,  or  if  either  party  to  the 
dispute  is  dissatisfied  with  their  decision,  the  ease  is  sub- 
mitted to  the  Joint  Arbitration  Board.  If  this  board  is 
unable  to  agree  the  umpire  sits  with  them,  examines  the 


444     The  Adjustment  of  Industrial  Disputes 

evidence,  and  casts  the  deciding  vote.  The  arbitration 
board  has  power  to  summon  members  of  the  employers' 
association  and  the  employees'  organization  as  witnesses. 
A  penalty  of  fine  and  suspension  is  provided  for  failure 
to  appear.  Expenses  of  the  arbitration  board  are  borne 
jointly.  A  fine  of  from  $50  to  $200  is  imposed  for  viola- 
tion of  the  agreement  or  working  rules  established  by 
the  Joint  Arbitration  Board.  All  fines  assessed  and  col- 
lected are  divided  equally  between  the  parties  to  the 
agreement  at  the  close  of  the  year.  In  case  a  quorum 
of  the  Joint  Arbitration  Board  cannot  be  secured,  the 
dispute  is  referred  immediately  to  the  Joint  Conference 
Board,  whose  decisions  are  final  and  binding  upon  the 
parties.  Appeal  on  all  jurisdictional  matters  may  be  had 
to  the  National  Board  of  Jurisdictional  Awards,  whose 
decisions  are  final.  A  preferential  union  shop  is  operated. 

A  National  System  of  Adjustment  Proposed. — To  pro- 
mote the  spirit  of  friendliness  and  cooperation  between 
the  employers  and  employees  of  the  United  States  and 
to  formulate,  if  possible,  a  set  of  working  principles  and 
a  program  of  action  to  this  end,  President  Wilson,  on 
September  3,  1919,  issued  a  call  for  a  National  Industrial 
Conference  to  be  participated  in  by  representatives  of 
employers,  employees,  and  the  public.  The  conference 
convened  on  October  6,  in  Washington.  In  the  course 
of  the  proceedings  the  labor  group  became  dissatisfied 
and  withdrew,  and  the  conference  terminated  on  October 
23,  without  accomplishing  very  much  that  was  practical. 
The  President  soon  called  for  a  second  conference,  offi- 
cially referred  to  as  the  President's  Industrial  Conference, 
which  convened  on  December  1,  1919,  in  Washington. 
This  congress  published  its  final  report  on  March  6,  1920, 
recommending  joint  organization  of  management  and  em- 
ployees for  the  prevention  of  industrial  disputes,  and  a 
comprehensive  plan  for  adjusting  such  disputes. 

The  general  plan  proposed  by  the  conference  comprises 
a  national  industrial  board,  local  regional  conferences,  and 
boards  of  inquiry  whose  functions  are  defined  by  geo- 
graphical rather  than  industrial  limits.  The  Regional  Ad- 


The  Adjustment  of  Industrial  Disputes     445 

justment  Conference,  to  which  disputants  may  voluntarily 
submit  their  differences,  shall  consist  of  four  representa- 
tives selected  by  the  parties,  and  four  others  from  the 
industry  involved  in  the  dispute,  two  of  whom  shall  be 
chosen  from  a  panel  of  twelve  representatives  of  employ- 
ers and  two  from  a  panel  of  twelve  representatives  of 
employees.  The  presiding  officer  of  the  board  shall  be  a 
regional  chairman  appointed  by  the  President  to  act  as 
conciliator.  In  case  of  an  unanimous  agreement  a  col- 
lective bargain,  having  the  same  force  as  a  trade  agree- 
ment, shall  be  put  into  operation,  but  if  an  unanimous 
decision  cannot  be  reached,  the  dispute  shall  be  referred 
to  the  National  Industrial  Board,  unless  the  parties  prefer 
to  submit  the  case  to  an  umpire  chosen  by  themselves. 
The  umpire's  decision  shall  have  the  same  effect  as  the 
unanimous  agreement  of  the  Regional  Adjustment  Con- 
ference. Facts  bearing  on  the  dispute  shall  be  submitted 
voluntarily  by  the  parties  concerned,  and  there  shall  be 
no  interference  with  production  pending  adjustment. 

The  Regional  Board  of  Inquiry  shall  consist  of  two  em- 
ployers chosen  from  the  top  of  the  panel  of  employers 
for  the  industry,  and  two  employees  selected  from  the  top 
of  the  employees'  panel  for  the  craft  involved,  none  of 
whom  shall  be  parties  to  the  dispute.  The  board 
shall  be  formed  by  the  regional  chairman  when  either 
or  both  of  the  parties  to  the  dispute  refuse  to  submit 
their  differences  voluntarily  to  the  agencies  of  adjust- 
ment. Certain  rights  to  subpena  witnesses  and  records 
and  to  publish  its  findings  as  a  guide  to  public  opinion 
shall  be  given  to  the  board.  If  both  parties  decide  to 
submit  the  dispute  to  a  Regional  Adjustment  Conference, 
such  a  body  is  automatically  created  by  adding  the  repre- 
sentatives of  the  disputants  to  the  Board  of  Inquiry. 

The  National  Industrial  Board,  with  headquarters  at 
Washington,  shall  supervise  and  administer  the  plan.  This 
board  shall  consist  of  nine  members  appointed  by  tho 
President  with  the  advice  and  consent  of  the  Senate. 
Three  of  the  members  shall  be  chosen  from  representatives 
of  industrial  employers,  three  from  representatives  of 


446     The  Adjustment  of  Industrial  Disputes 

industrial  employees,  and  three  shall  represent  the  public. 
One  of  the  representatives  of  the  public  shall  be  chosen 
chairman  by  the  President,  and  all  shall  be  selected  with- 
out regard  to  political  affiliations. 

Public  utilities  are  brought  within  scope  of  the  plan 
by  the  provision  that  in  such  cases  the  government  agency 
delegated  with  power  to  regulate  the  service  shall  have 
two  representatives  in  the  Regional  Adjustment  Confer- 
ence. The  findings  of  the  board  shall  be  reported  imme- 
diately to  the  rate-making  body.  The  plan  is  also  made 
applicable  to  public  employees,  but  with  significant  modifi- 
cations. In  a  dispute  involving  public  employees,  the 
Regional  Adjustment  Conference  shall  consist  of  two 
representatives  from  the  legislative  branch  of  the  govern- 
ment authorized  by  law  to  make  appropriations,  two  from 
the  department  employing  the  workers  involved,  two 
selected  to  represent  the  public  service  employees  con- 
cerned, and  two  chosen  by  the  employees'  representatives 
from  the  first  twelve  names  on  the  general  panel.  What- 
ever decisions  are  reached  shall  be  submitted  to  the  legis- 
lative branch  concerned,  as  a  basis  for  appropriations. 
There  is  no  board  of  inquiry;  all  facts  bearing  on  the 
controversy  shall  be  obtained  by  the  conference  board, 
and  there  shall  be  no  appeal  to  the  National  Industrial 
Board  and  no  reference  to  an  umpire. 

The  general  plan  provides  no  penalties  other  than  those 
imposed  by  public  opinion,  and  does  not  provide  for 
compulsory  arbitration.  The  right  to  strike  is  not  denied. 
The  question  of  the  open  or  the  closed  shop  shall  not 
be  submitted  for  arbitration,  but  shall  be  left  to  the 
arbitrament  of  each  establishment  as  the  local  conditions 
may  determine.  The  plan  has  not  been  applied,  but  de- 
serves consideration. 

Conclusions. — No  method  of  settling  labor  controversies 
is  generally  applicable.  In  some  countries  compulsory 
arbitration  is  fairly  effective,  while  in  others  conciliation 
and  voluntary  arbitration  are  more  successful.  Much 
depends  upon  the  political  power  of  the  workers,  their 
attitude  towards  the  various  methods  of  adjustment,  the 


The  Adjustment  of  Industrial  Disputes    447 

reputation  of  the  government,  courts,  and  arbitrators  for 
fair  dealing,  the  attitude  of  employers  towards  collective 
agreements,  and  the  intelligence  of  public  opinion.  Dis- 
satisfaction with  the  decisions  of  third  parties  in  indus- 
trial disputes  in  the  United  States  has  resulted  in  a  strong 
movement  for  settlement  of  differences  within  the  "indus- 
trial family"  under  the  trade  agreement  or  by  means  of 
shop  committees  and  industrial  councils.  The  trade  agree- 
ment is  the  treaty  of  peace  in  industry,  and  experience 
with  such  compacts  warrants  the  conclusion  that  they 
constitute  the  most  effective  agency  for  the  promotion 
of  industrial  goodwill  and  the  protection  of  the  interests 
of  employers  and  employees,  where  the  bargaining  power 
of  each  is  relatively  equal. 


SELECTED  REFERENCES 

ADAMS,  T.  S.,  AND  SUMNER,  H.  L.,  Labor  Problems,  1905,  Chap. 
VIII. 

ALLEN,  II.  J.,  Is  the  Industrial  Court  Making  Goodf  System, 
39:25-26,  Jan.,  1921. 

ATKINS,  W.  E.,  The  Kansas  Court  of  Industrial  Relations,  Jour. 
of  Pol.  Eeon.,  28:339-352,  April,  1920. 

BARNETT,  G.  E.,  AND  McCABB,  D.  A.,  Mediation,  Investigation  and 
Arbitration  in  Industrial  Disputes,  1916. 

BOLEN,  G.  L.,  Getting  a  Living,  1903,  Chap.  XXVII. 

CARLTON,  F.  T.,  The  History  and  Problems  of  Organized  Labor, 
revised  edition,  1920,  Chap.  X. 

CLARK,  V.  S.,  The  Labor  Movement  in  Australasia,  1907. 

COHEN,  J.  H.,  Law  and  Order  in  Industry,  1916. 

COMMONS,  J.  Rr,  AND  ANDREWS,  J.  B.,  Principles  of  Labor  Legis- 
lation, revised  edition,  1920,  Chap.  III. 

FEIS,  HERBERT,  The  Kansas  Miners  and  the  Kansas  Court,  Survey, 
47:822-826,  867,  Feb.  25,  1922. 

GOMPERS,  SAMUEL,  Labor  and  the  Employer,  1920,  Chap.  X. 

GROAT,  G.  G.,  An  Introduction  to  the  Stwiy  of  Organized  Labor 
in  America,  1917,  Chaps.  XII,  XJ1I  and  XVIII. 

KING,  W.  L.  M.,  Industry  and  Humanity,  1918,  Chaps.  X  and  XL 

MITCHELL,  JOHN,  Organized  Labor,  1903,  Chap.  XXXIX. 

PITTMAN,  ALFRED,  What  I  Learned  About  the  Kansas  Court  of 
Industrial  Relation*,  System,  39:26-32,  Jan.,  1921. 

SUKFERN,  A.  K.,  Conciliation  and  Arbitration  in  the  Coal  In- 
dustry of  America,  1915. 


448     The  Adjustment  of  Industrial  Disputes 

UNITED  STATES  BUREAU  OF  LABOR  STATISTICS,  Bulletins'  60,  62,  98, 

124,  133  and  191. 
UNITED   STATES   COMMISSION  ON  INDUSTRIAL  RELATIONS,  Final 

Report,  1916,  pp.  117-124. 
UNITED   STATES  INDUSTRIAL   COMMISSION,   Reports,  19:833-862, 

1902. 
WATKINS,  G.  S.,  Labor  Problems  and  Labor  Administration  in 

the  United  States  During  the  World  War,  1919,  Part  II, 

pp.  123-175. 
WEBB,  SIDNEY,  AND  WEBB,  BEATRICE,  Industrial  Democracy,  1920, 

Part  II,  Chaps.  II  and  III. 


CHAPTER  XIX 
SHOP  COMMITTEES  AND  INDUSTRIAL  COUNCILS 

Political  and  Industrial  Democracy. — The  theory  of 
political  democracy  has  gained  general  acceptance  in 
practically  every  country  of  the  world.  Political  de- 
mocracy is  the  product  largely  of  the  last  few  centuries, 
and  it  has  achieved  its  greatest  successes  during  the  last 
half  century.  In  a  very  real  sense  democracy  is  still  an 
experiment,  but  the  accomplishments  of  democratic  rule 
have  proved  so  beneficial  for  the  mass  of  people  that  it 
is  inconceivable  that  the  world  will  ever  revert  to  political 
autocracy. 

Having  secured  democratic  control  of  the  machinery  of 
government,  men  and  women  are  beginning  to  divert  their 
energies  to  the  movement  for  industrial  democracy.  In- 
dustrial freedom  is  the  inevitable  sequence  of  political 
freedom.  The  mass  of  people  who  are  politically  free 
will  not  consent  to  remain  in  a  status  of  industrial  sub- 
ordination. The  natural  human  desire  for  freedom  may 
be  suppressed  but  it  cannot  be  destroyed.  "Just  as 
benevolent  despotism  in  politics  has  given  way  to  a  great 
democracy  wherein  the  governed  have  every  right  of  self- 
expression,  so  in  industry  we  are  now  finding  the  old 
system  being  set  aside.  .  .  .  Industry  is  becoming  demo- 
cratic."1 Capital,  management,  labor,  and  the  public 
are  beginning  to  realize  that  democracy  is  as  applicable 
to  industry  as  to  politics.  Conceding  the  right  to  demo- 
cratic industry,  there  remains  the  problem  of  evolving 
ways  and  means  of  achieving  it,  so  as  to  safeguard  tho 
foundations  of  civilization.  Numerous  experiments  aro 
being  made;  these  are  the  elemental  processes  of  democ- 
ratization of  industrial  relations. 

'Cyrus  H.  McCormick,  Jr.,  Scientific  American,  Feb.  7,  1920,  p.  132. 

440 


450     Shop  Committees  and  Industrial  Councils 

The  Nature  of  Shop  Committees,  Works  Councils,  and 
Industrial  Councils. — Methods  of  promoting  industrial 
democracy  are  so  varied  that  no  uniform  and  generally 
acceptable  nomenclature  exists.  Distinctions  are  suffi- 
ciently apparent,  however,  to  warrant  a  fairly  acceptable 
definition  of  terms.  The  differences  between  shop  com- 
mittees, works  councils,  and  industrial  councils  are  in- 
dicated by  the  area  of  activity  assigned  to  each  form  of 
organization.  The  "shop  committee"  is  an  organization 
consisting  of  representatives  of  the  workers,  or  representa- 
tives of  both  the  workers  and  the  management,  intrusted 
with  the  business  of  adjusting  collectively  the  conditions 
and  regulations  of  employment  relations  in  a  given  de- 
partment or  shop  in  the  works  or  plant.  Its  logical  field 
of  operation  is,  as  the  name  implies,  the  shop  and  not 
the  whole  plant.  The  "works  council"  is  a  similarly  con- 
stituted body  whose  field  of  action  is  not  confined  to  the 
department  or  shop  but  includes  the  entire  works  or  plant 
and  may  extend  to  a  group  of  contiguous  plants.  In  addi- 
tion to  the  shop  committee  and  works  council  it  may  be 
expedient  to  form  representative  bodies  for  a  given  in- 
dustry in  a  certain  limited  geographical  area.  To  such 
a  body  the  term  "district  industrial  council"  is  given. 
It  may  become  necessary,  moreover,  to  organize  a  repre- 
sentative body  for  the  industry  throughout  the  entire 
country;  such  a  body  is  known  as  the  "national  industrial 
council."  Each  form  of  organization  may  be  single,  that 
is,  employers  and  employees  may  have  their  own  separate 
committees  or  councils  and  meet  only  occasionally  in 
joint  session  for  the  purpose  of  adjusting  difficulties  and 
problems;  or,  a  joint  form  of  organization  may  be  pro- 
vided for  in  which  representatives  of  workers  and  em- 
ployers meet  jointly  in  a  common  committee  or  council. 

Reasons  for  Establishing  Committees  and  Councils. — 
Many  reasons  have  been  assigned  for  the  creation  of  shop 
committees  and  works  councils  by  employers  and  em- 
ployees. These  motives  are  frequently  selfish,  but  in  many 
cases  self-aggrandizement  is  tempered  by  sincere  humani- 


Shop  Committees  and  Industrial  Councils     451 

tarianism;  in  still  other  instances  the  motive  is  wholly 
benevolent. 

1.  The  Promotion  of  Industrial  Efficiency. — Many  em- 
ployers have  discovered  that  there  is  a  very  intimate  con- 
nection between  employee  participation  in  control  of  condi- 
tions of  employment,  on  the  one  hand,  and  the  increase  of 
production,  on  the  other.    Men  are  much  more  likely  to  be 
interested  in  work  if  they  are  given  a  voice  in  the  determi- 
nation of  the  conditions  under  which  the  work  is  to  be  done. 

2.  Satisfaction  of  the  Workers'  Desire  for  a  Share  in  the 
Adjustment  of  Employment  Relations. — Employers  have 
recognized  the  spirit  that  motivates  the  workers  to  secure 
control  of  industrial  life,  and,  accepting  this  desire  as  a 
laudable  one  within  certain  limits,  have  extended  to  them 
an  opportunity  to  have  representation  in  the  councils  of 
industry. 

3.  An  Antidote  for  Industrial  Unrest. — The  spread  of 
industrial  unrest  during  the  last  decade  undoubtedly  has 
had  much  to  do  with  the  initial  impetus  that  was  given 
to  the  movement  for  the  democratization  of  industrial  rela- 
tions.    Employee  representation  plans  afford  a  channel  of 
communication  between  management  and  men.    In  the  ab- 
sence of  such  a  channel  grievances  and  ill-feeling  accumu- 
late and  serious  consequences  in  the  form  of  labor  turnover, 
limitation  of  production,  and  walkouts  are  almost  inevi- 
table. 

4.  An    Agency    of   Education. — Many    employers    have 
provided  for  joint  negotiations  and  control  because  shop 
committees  and  works  councils  afford  an  opportunity  for 
imparting  to 'the  employees  important  data  on  production, 
technical  readjustments  within  the  plant,  and  fundamental 
economic  and  social  problems. 

5.  The  Promotion  of  Industrial  Goodwill. — Modern  in- 
dustrial relations  arc  too  often  characterized  by  suspicion, 
fear,   distrust,   and   class  hatred.     Shop   committees  and 
works  councils  provide  an  organized  form  of  contact  be- 
tween employers  and  employees,  which  tends  to  result  in 
a  deeper  appreciation  of  each  other's  problems  and  points 


452     Shop  Committees  and  Industrial  Councils 

of  view.  Around  the  conference  table  representatives  of 
workers  and  management  gather  periodically,  and  a  spirit 
of  intimacy,  friendliness  and  confidence  tends  to  develop. 

6.  The  Defeat  of  the  Trade  Union  Movement. — Many 
employers  consciously  introduce  "company  unions,"  shop 
committees,  or  works  councils  because  they  believe  that 
such  organizations  preclude  the  necessity  of  trade  union 
organization  and  independent  collective  bargaining  on  the 
part  of  their  employees.    The  shop  organizations  are  within 
the  control  of  the  company  and  little  is  feared  from  the 
union  organizer.    The  employer  enjoys  the  cherished  status 
of  running  his  business  as  he  sees  fit,  without  outside  inter- 
ference. 

7.  The  Realization  of  Humanitarianism. — It  has  occurred 
to  some  employers  that  industry,  as  organized  and  con- 
trolled at  present,  affords  little  opportunity  for  that  larger 
expression  of  self  and  development  of  individuality  so  es- 
sential to  a  desirable  civilization.     In  the  words  of  an 
American  industrial  leader:    "Men  are  rapidly  coming  to 
see  that  human  life  is  of  infinitely  greater  value  than  ma- 
terial wealth;  that  the  health,  happiness  and  wellbeing  of 
the  individual,  however  humble,  is  not  to  be  sacrificed  to 
the  selfish  aggrandizement  of  the  more  fortunate  or  more 
powerful.     Modern  thought  is  placing  less  emphasis  on 
material  considerations.    It  is  recognizing  that  the  basis  of 
national  progress,  whether  industrial  or  social,  is  the  health, 
efficiency,  and  spiritual  development  of  the  people."2 

Historical  Development. — The  basic  principles  of  shop 
or  industrial  representation  are  not  new.  The  movement 
for  employee  representation  in  industry  is  coincident  with 
the  development  of  modern  industrialism.  The  develop- 
ment of  works  committees  and  similar  organizations  de- 
signed to  give  the  workers  a  voice  in  the  control  of  condi- 
tions of  employment  is  found  in  two  important  periods; 
namely,  the  long  period  of  industrial  development  pre- 
ceding the  World  War,  and  the  period  following  the  out- 
break of  that  momentous  struggle,  In  a  very  true  sense 

*John  D.  Kockefeller,  Jr.,  Representation  in  Industry,  p.  28. 


Shop  Committees  and  Industrial  Councils     453 

works  committees  antedate  trade  unionism.  Certain  con- 
ditions incident  to  the  development  of  modern  indus- 
trialism made  imperative  the  formation  of  workers'  com- 
mittees to  deal  with  employers  concerning  employment 
relations.  Among  these  conditions  were  the  separation  of 
the  workers  from  the  tools  and  machinery  of  production, 
the  increasing  complexity  of  the  structure  of  industry, 
the  development  of  minute  specialization  of  tasks,  the 
ever-widening  breach  between  employers  and  employees, 
the  constant  scrapping  of  old  methods  and  processes  and 
the  introduction  of  new  devices  and  machines.  To  im- 
prove their  conditions  the  workers  dispatched  delegations 
to  remonstrate  with  the  employer.  These  delegations  or 
committees  were  often  temporary  bodies,  and  were  not 
often  successful,  but  they  constituted  the  germ  of  the 
trade  union  movement.  As  trade  unionism  developed,  a 
network  of  committees  and  agencies  were  evolved  to  safe- 
guard the  interest  of  the  workers  in  the  shop,  mill,  and 
mine.  Thus  we  have  "shop  delegates,"  "works  represen- 
tatives," "shop  stewards,"  "collectors,"  and  "watch  or 
vigilant  committees."  The  "chapel"  in  the  printing  in- 
dustry antedates  the  end  of  the  seventeenth  century. 
Determination  of  piecework  rates,  standardization  of 
tasks,  and  general  enforcement  of  union  rules  and  agree- 
ments are  among  the  duties  performed  by  the  local,  dis- 
trict, and  national  committees  that  have  come  into  exis- 
tence in  the  evolution  of  labor  organizations. 

It  is  in  the  conditions  produced  by  the  World  War, 
however,  that  one  must  seek  the  causes  of  the  growth  of 
shop  committees  and  works  councils.  The  need  for  unin- 
terrupted production  during  that  crisis  greatly  accelerated 
the  movement  for  collective  dealing  between  employers 
and  employees.  Under  the  leadership  of  the  government, 
or  of  their  own  volition,  employers  began  to  provide 
channels  of  communication  between  management  and 
workers,  and  these  channels  took  the  form  of  shop  com- 
mittees, and  works,  district,  and  national  councils.  Tho 
growth  of  democratic  tendencies  among  the  employers  of 
labor  was  surprisingly  great,  and  the  workers'  instinct 


454    Shop  Committees  and  Industrial  Councils 

for  self-government  in  industry  was  given  unprecedented 
expression. 

Several  American  firms  had  devised  schemes  for  the 
promotion  of  industrial  democracy  prior  to  the  war,  but 
the  movement  received  its  greatest  impetus  in  the  United 
Kingdom.  The  reports  of  the  Reconstruction  Committee  Sub- 
committee on  Relations  between  Employers  and  Employees 
(1917),  commonly  known  as  the  "Whitley  committee," 
and  other  investigating  committees  made  clear  the  causes 
of  industrial  unrest  and  suggested  possible  remedies.  The 
Whitley  report  attracted  a  great  deal  of  attention  at 
home  and  abroad.  Urging  the  importance  of  continuing 
the  spirit  of  cooperation  that  had  been  developed  during 
the  war,  this  committee  suggested  the  establishment  in 
each  industry  of  industrial  councils  to  represent  both  em- 
ployers and  employees.  There  was  recommended  a  triple 
system  of  representation ;  namely,  National  Joint  Industrial 
Councils,  District  Industrial  Councils,  and  Works  Com- 
mittees, to  cover  any  trade  or  industry  to  which  such  a 
scheme  could  be  applied  successfully.  The  committee  was 
convinced  that  the  best  solution  of  the  problem  of  industrial 
relations  lies  in  the  use  of  the  power  and  machinery  of 
associations  of  employers  and  organizations  of  workers. 
Both  the  structure  and  functions  of  the  various  councils 
and  committees  were  to  be  sufficiently  elastic  to  fit  the 
needs  of  the  different  trades  and  industries.  Permanent 
improvement  seemed,  to  the  committee,  to  be  found  in 
joint  control  of  industry  rather  than  in  specialized 
schemes  to  furnish  financial  incentives.  Upon  the  ap- 
proval of  the  first  report  of  the  committee  the  idea  gained 
wide  acceptation,  and  soon  the  Industrial  Councils  Divi- 
sion of  the  Ministry  of  Labor  was  created  for  the  purpose 
of  giving  assistance  and  information  to  those  who  desired 
to  organize  such  councils  and  to  secure  data  concerning 
the  results  achieved  by  the  various  plans. 

Whereas  the  plans  for  industrial  representation  in  Great 
Britain  are  closely  coordinated  with  trade  union  organiza- 
tion, the  movement  in  the  United  States  has  not  depended 


Shop  Committees  and  Industrial  Councils     455 

upon  the  existence  and  cooperation  of  trade  unions,  except 
in  a  few  instances.  For  many  years  prior  to  the  war, 
American  employers  sought  to  gain  the  confidence  and 
loyalty  of  their  workers  by  instituting  or  encouraging 
the  workers  themselves  to  organize  clubs  and  associations 
for  social  purposes  and  the  promotion  of  industrial  better- 
ment activities.  It  was  not  a  far  step  from  these  associa- 
tions to  shop  committees  and  councils  designed  to  aid 
in  the  control  of  conditions  of  employment.  There  were 
also  informal  deputations  of  workers  in  many  establish- 
ments, for  the  purpose  of  adjusting  differences  between 
employers  and  employees.  Where  trade  unions  were  or- 
ganized, grievance  committees  or  wage  committees  were 
instituted  in  the  individual  establishments  to  deal  with 
the  management,  and  these  often  became  the  recognized 
channel  of  communication. 

Between  1886  and  1914  numerous  attempts  were  made 
to  introduce  shop  committees  and  works  councils  in  the 
United  States.  The  first  suggestion  for  a  works  council 
has  been  traced  to  an  article  on  "The  Shop  Council," 
published  by  the  Society  for  Political  Education,  in  1886. 
The  council  suggested  provided  for  four  members,  two 
elected  by  the  wage-earners  and  two  by  the  management, 
with  a  chairman  chosen  by  these  four.  This  plan  seems 
not  to  have  been  applied.  In  1904  the  Nernst  Lamp  Com- 
pany of  Pittsburgh  introduced  a  "factory  committee" 
consisting  of  representatives  of  the  factory  operatives, 
foremen,  and  clerical  force,  with  the  superintendent  of 
the  plant  as  chairman.  In  1907  the  Nelson  Valve  Com- 
pany of  Philadelphia  established  a  scheme  providing  for 
an  upper  and  a  lower  house,  the  former  comprising  fore- 
men, and  the  latter,  one  representative  from  each  shop. 
The  Hart,  Schaffner  and  Marx  plan,  discussed  in  a 
previous  chapter,  was  adopted  in  1910,  and  in  1913  the 
Packard  Piano  Company  of  Fort  Wayne,  Indiana,  intro- 
duced a  plan  of  industrial  representation  patterned  after 
the  federal  government  of  the  United  States.  Depart- 
mental shop  committees  were  introduced  by  the  White 


456     Shop  Committees  and  Industrial  Councils 

Motor  Company  of  Cleveland,  Ohio,  in  1914.  Some  of 
these  earlier  plans  have  been  abandoned,  while  others 
have  continued  to  function  successfully. 

In  1915  the  Colorado  Fuel  and  Iron  Company,  which 
had  experienced  serious  strikes  in  1913-1914,  introduced 
the  plan  under  which  employees  in  each  of  the  company 's 
mining  districts,  by  secret  ballot  elect  representatives  who 
act  on  their  behalf  in  matters  concerning  sanitation, 
recreation,  education,  wages  and  employment.  Many 
other  concerns  adopted  similar  plans  in  1915,  1916,  and 
1917. 

In  1917  the  Shipbuilding  Labor  Adjustment  Board  and 
the  President's  Mediation  Commission  aided  in  the  forma- 
tion of  shop  committees  in  the  shipping  yards  and  the 
Arizona  copper  district,  respectively.  In  the  agreements 
which  it  provided  in  1918,  the  United  States  Fuel  Ad- 
ministration established  employees'  committees,  and  in 
the  same  year  the  United  States  Railroad  Administration 
provided  that  disputes  should  be  adjusted  by  a  "general 
committee  of  the  employees  up  to  and  including  the  chief 
operating  officer."  During  the  years  1918  and  1919  the 
National  War  Labor  Board  provided,  in  many  of  its 
awards,  for  the  selection  of  employees'  committees  for 
the  promotion  of  amicable  industrial  relations,  thereby 
stimulating  production.  Throughout  this  period  numer- 
ous firms  voluntarily  introduced  plans  for  employee 
representation.  In  November,  1919,  the  United  States 
Bureau  of  Labor  Statistics  reported  160  companies  having 
some  form  of  employee  committees  in  operation.  About 
the  same  time  the  National  Industrial  Conference  Board 
stated  that  works  councils  were  then  in  existence  in  200 
establishments  employing  500,000  workers.  Press  dis- 
patches in  1920  stated  that  over  300  such  schemes  were 
in  operation  in  this  country.  In  the  period  of  depression 
following  the  war  many  plans  were  abandoned,  but  many 
new  ones  were  introduced  and  in  1922  at  least  725  plans 
are  functioning  successfully.  The  total  number  of  experi- 
ments in  this  country,  however,  is  relatively  small  in 
proportion  to  the  number  of  industrial  establishments. 


Shop  Committees  and  Industrial  Councils    457 

The  growth  of  the  movement  in  the  United  States  has 
been  less  rapid  and  less  comprehensive  than  in  Great 
Britain.  Considerable  progress  has  been  made  by  em- 
ployee representation  plans  in  other  countries,  including 
France,  Germany,  and  Austria.  In  Russia,  the  workers' 
councils  or  Soviets  are  the  fundamental  institution  in  the 
bolshevik  regime. 

Types  and  Structure. — All  works  employee  representa- 
tion plans  have  a  common  feature:  each  is  a  representa- 
tive body  selected  by  and  from  the  employees  of  the 
establishment.  Differences  obtain,  however,  in  their  or- 
ganization and  procedure.  In  some  cases  the  structure 
and  functions  are  simple  and  informal,  while  in  others 
they  are  complex  and  formal.  In  some  instances,  moreover, 
the  plans  are  more  or  less  haphazard  and  there  is  no 
conscious  attempt  to  adjust  them  to  the  requirements  and 
conditions  of  the  plant.  In  others  the  plan  is  nicely  ad- 
justed to  the  needs  of  the  establishment. 

Generally  speaking,  there  are  two  dominant  types  of 
employee  representation  schemes  in  the  United  States; 
namely,  (1)  the  "governmental"  type,  and  (2)  the  "com- 
mittee" type.  The  governmental  type  is  patterned  after 
the  United  States  government.  It  provides  for  a  cabinet, 
senate,  and  house  of  representatives,  or,  sometimes,  for 
the  two  houses  only.  This  plan,  known  also  as  the  ' '  Indus- 
trial  Democracy"  plan,  is  expounded  most  thoroughly  by 
Mr.  John  Leitch  in  his  book  "Man  to  Man."  Under  this 
scheme  the  cabinet  consists  of  the  higher  executives  of  the 
plant,  the  senate  comprises  the  foremen,  and  the  house 
consists  of  representatives  elected  by  the  employees. 
Elections  are  secret.  In  a  modified  form  of  this  plan  the 
senate  and  cabinet  have  been  combined  into  a  single  body 
known  as  the  "planning  board."  The  senate  and  house 
meet  separately  and  elect  their  own  officers  and  standing 
committees  to  which  are  referred  all  prospective  legisla- 
tion. Bills  must  puss  both  houses  and  be  approved  by 
the  executives.  Either  the  cabinet  or  the  senate,  when 
these  two  are  distinct,  may  initiate  legislation  by  a  mes- 
•age  to  the  house.  Representatives  of  the  employees  act 


458     Shop  Committees  and  Industrial  Councils 

as  councillors  in  their  departments,  receive  and  transmit 
all  suggestions  and  complaints,  and  keep  the  other  work- 
ers informed  of  the  progress  of  legislation.  Most  plans 
of  the  governmental  type  have  as  an  essential  supplemen- 
tary feature,  a  "  collective  economy  dividend,"  which  is 
a  profit-sharing  system.  Savings  in  the  cost  of  production 
are  divided  equally  between  the  company  and  the  em- 
ployees. To  avoid  confusion  with  regular  wages,  em- 
ployees are  given"  their  dividends  at  frequent  intervals 
in  separate  envelopes  marked  "employee's  dividend."  In 
the  Goodyear  Tire  and  Rubber  Company's  governmental 
plan  both  the  senate  and  the  house  are  composed  of  repre- 
sentatives elected  by  the  workers.  Provision  is  also  made 
for  joint  conferences,  consisting  of  three  members  of  the 
senate,  three  members  of  the  house,  and  six  representatives 
of  the  factory  management,  for  the  purpose  of  consider- 
ing questions  of  joint  interest. 

The  committee  type  sometimes  consists  of  a  single  com- 
mittee and  sometimes  of  a  group  of  committees  perform- 
ing specialized  functions.  These  committees  in  their  least 
developed  form  comprise  only  representatives  of  the 
workers,  who  confer  with  representatives  of  the  manage- 
ment concerning  employment  problems.  In  their  more 
developed  form  they  are  joint  committees  consisting  of 
representatives  of  both  employers  and  employees. 

In  addition  to  the  foregoing  types,  there  exists  a  mis- 
cellaneous group  of  committees  and  councils  which  do 
not  conform  to  the  general  features  enumerated  or  else 
embrace  features  that  are  common  to  both  of  the  general 
types.  Less  complete  and  formal  organization,  for  ex- 
ample, is  found  in  small  plants  where  contacts  between 
employer  and  employees  are  more  intimate  and  more 
easily  maintained.  There  is  the  "company  union,"  which 
is  subsidiary  to  the  employees'  association,  embracing  all 
or  a  part  of  the  working  force  in  a  given  establishment; 
it  may  conform  to  the  governmental  or  to  the  committee 
type.  Finally,  there  are  the  shop  stewards  and  trade 
union  shop  committees. 

Constitution   and   Methods   of  Procedure. — From   the 


Shop  Committees  and  Industrial  Councils    459 

standpoint  of  their  constitution,  representative  bodies  of 
employees  fall  into  two  classes.  The  first  are  "single 
works  councils,"  comprising  the  elected  representatives 
of  all  the  employees  of  an  establishment.  All  questions 
and  issues  arising  in  employment  relations  are  considered 
by  this  body,  so  that  its  functions  are  comprehensive  and 
its  authority  coextensive  with  the  plant.  The  second  are 
those  which  consist  not  only  of  a  central  or  general  works 
council  but  also  of  a  network  of  departmental,  divisional, 
and  shop  committees,  each  representing  only  a  part  of 
the  workers.  Although  the  central  single  works  council 
has  been  introduced  in  large  establishments,  it  is  found 
chiefly  in  smaller  plants.  The  supplementary  committee 
system  predominates  in  relatively  large  establishments. 

While  there  is  no  unanimity  in  the  method  of  procedure 
of  shop  committees  and  works  councils,  sufficient  uni- 
formity exists  to  warrant  a  summary  of  essential  features. 

1.  Voting. — Comparatively  few  plans  prescribe  qualifica- 
tions for  voting.     Ordinarily  any  worker  in  the  employ 
of  the  company  at  the  time  of  election  is  entitled  to  vote. 
In  some  plans,  however,  it  is  prescribed  that  the  right  to 
vote  shall  be  based  upon  a  certain  period  of  service  with 
the  company,  ranging  from  one  month  to  one  year,  the 
attainment  of  a  certain  age,  frequently  18  years,  and  Ameri- 
can citizenship  or  the  possession  of  the  first  papers  for 
naturalization. 

2.  Qualifications  of  Employees'  Representatives. — Elig- 
ibility for  the  office  of  representative  depends  upon  Amer- 
ican citizenshjp  or  the  possession  of  first  naturalization  pa- 
pers, attainment  of  a  certain  age,  usually  21  years,  and  a 
stated  length  of  service  with  the  company.     A  period  of 
continuous  service  for  one  year  preceding  the  time  of  elec- 
tion is  usually  required. 

3.  Term  of  Office  and  Reelection. — The  term  of  office  is 
six  months  or  one  year.     Representatives  are  eligible  for 
reelection,  conditioned  of  course  upon  satisfactory  service. 
Alternation  in  office  is  generally  provided  for  so  that  some 
members  of  the  committee  or  council  are  experienced,  a 
condition  which  assures  smooth  operation  of  the  plan. 


460     Shop  Committees  and  Industrial  Councils 

4.  Referendum    and    Recall. — Representatives    of    the 
workers  are  nearly  always  subject  to  recall  on  a  two-thirds 
vote  of  the  employees  in  their  section,  department,  shop, 
or  plant,  depending  upon  the  functional  area  of  the  repre- 
sentative body.    Although  a  two-thirds  vote  is  usually  re- 
quired for  the  recall  of  a  representative,  some  plans  provide 
for  a  majority  vote. 

5.  Methods  of  Election. — Nominations  and  elections  are 
by  secret  ballot  with  adequate  provision  for  securing  an  im- 
partial count.     The  method  of  election  may  be  direct,  or 
provision  may  be  made  for  the  double  process  of  nomina- 
tion and  election.    It  is  frequently  required  that  elections 
shall  take  place  on  certain  days,  and  that  notices  of  election 
shall  be  posted  a  certain  number  of  days  preceding  the 
election.    The  conduct  of  elections  is  entrusted  to  a  com- 
mittee or  to  a  set  of  judges  chosen  for  the  purpose,  either 
by  the  employees  or  jointly  by  the  management  and  the 
workers.     Some  plans  provide  a  recount  of  votes  in  case 
any  irregularities  are  suspected.    Special  elections  are  pro- 
vided for  to  fill  vacancies. 

6.  Meetings. — Meetings   are  arranged  at   more   or  less 
regular  intervals,  in  some  plants  as  often  as  once  a  month, 
and  provision  is  made  for  calling  special  meetings.    In  some 
cases  meetings  are  held  only  when  complaints  or  grievances 
arise.     Where  only  employees'  committees  exist,  the  man- 
agement delegates  a  representative  to  negotiate  with  these 
bodies,  but  he  is  not  entitled  to  vote.    Most  of  the  plans 
provide  for  a  general  joint  committee  or  conference  com- 
mittee representing  both  employers  and  employees,  and 
for  subcommittees  either  joint  or  of  employees'  represen- 
tatives alone.     The  conference  committee  deals  with  ques- 
tions appealed  from  subcommittees  or  it  may  deal  with 
questions  not  taken  up  by  the  latter. 

7.  Protection   of   Employees'   Representatives    Against 
Discrimination.      Employee    representation    plans    often 
guarantee  that  there  shall  be  no  discrimination  because  of 
race,  sex,  political  or  religious  affiliation,  nor  because  of 
any  action  taken  by  the  employees  in  their  capacity  as 
representatives.    In  some  plans  no  provision  is  made  against 


Shop  Committees  and  Industrial  Councils     461 

discrimination  because  of  affiliation  with  outside  labor  or- 
ganizations, while  in  others,  it  is  specified  that ' '  there  shall 
be  no  discrimination  by  the  company  or  by  any  of  its  em- 
ployees on  account  of  membership  or  nonmembership  in  any 
society,  fraternity  or  union."  Some  plans  specify  "any 
lawful  union,  society  or  fraternity." 

8.  Compensation  of  Representatives. — In  most  plans  it 
is  specified  that  the  company  will  bear  all  expenses  neces- 
sary to  the  operation  of  the  shop  committee  or  works  coun- 
cil, although  where  these  committees  or  councils  are  sub- 
sidiary agents  of  labor  organizations  their  expenses  are 
borne  by  the  union.  When  the  meetings  are  held  on  com- 
pany time  the  employees'  representatives  receive  payment 
as  if  they  were  at  their  regular  work.  In  some  cases  the 
workers '  representatives  are  paid  out  of  an  assessment  made 
upon  employees.  Often,  expenses  incurred  in  joint  meet- 
ings are  prorated  between  the  company  and  the  employees, 
each  group  defraying  the  expenses  incurred  by  its  own 
representatives. 

Functions.  1.  Adjustment  of  Grievances. — Where  no 
shop  committee  system  exists  there  is  no  organized  com- 
munication between  management  and  men  which  assures 
a  square  deal.  Grievances  arise  because  of  autocratic  and 
unjust  treatment  by  foremen,  who  may  be  actuated  by 
race  prejudice,  religious  bias,  or  political  antagonism ;  mis- 
takes in  wages  or  piece-work  payments;  or  the  inelastic 
interpretation  and  application  of  shop  rules.  Representa- 
tion plans  provide  an  organized  contact  between  the  work- 
ing force  and  management,  and  machinery  is  established 
for  the  hearing  and  adjustment  of  grievances  and  disputes. 
This  indeed  is  a  major  function  of  all  such  plans.  Griev- 
ances are  considered  first  by  the  workers'  departmental 
representative  and  the  foreman  or  the  departmental  com- 
mittee. Cases  not  adjusted  by  these  agencies  are  referred 
to  the  plant  committee  and,  failing  adjustment  at  this 
point,  go  to  the  board  of  arbitration  or  some  other  body. 

2.  Reputation  of  Working  Conditions. — The  term  "work- 
ing conditions"  here  includes  such  matters  as  accident  pre- 
vention, sanitation,  ventilation  and  hygiene.  Shop  commit- 


462     Shop  Committees  and  Industrial  Councils 

tees  and  works  councils,  functioning  through  various  sub- 
committees, perform  remarkably  constructive  duties  in  the  in- 
troduction of  safety  devices,  the  promotion  of  responsibility 
on  the  part  of  the  workers  to  prevent  accidents,  the  en- 
couragement and  maintenance  of  sanitary  conditions,  the 
provision  and  administration  of  medical  attention,  the  con- 
trol of  lunch  rooms  and  arrangement  of  meal  hours,  and 
the  time  for  beginning  and  stopping  work. 

3.  Promotion  of  Factory  Efficiency. — Limitation  of  out- 
put and  antagonism  by  the  workers  to  the  introduction  of 
improved  methods,  processes,  and  machines  have  always 
been  matters  of  serious  concern  to  employers.    Cooperative 
and  constructive  activities  are  undertaken  by  shop  com- 
mittees and  works  councils  to  reduce  the  waste  in  time, 
eliminate  the  losses  incurred  by  profligate  waste  of  ma- 
terials and  equipment  and  the  careless  handling  of  ma- 
chines, reduce  labor  turnover,  and  help  devise  methods  of 
stabilizing  employment  and  increasing  efficiency  of  produc- 
tion throughout  the  works.    Here  again  the  subcommittees 
perform  good  work.     Suggestions  are  also  made  for  the 
improvement  of  plant  processes.     Giving  the  men  a  part 
in  these  various  activities  leading  to  efficiency  has  removed 
much  of  the  suspicion  and  antagonism  which  obtained  when 
such  matters  were  handled  entirely  by  the  management. 

4.  Determination  of  the  Terms  of  Employment. — Whether 
the  shop  committee  is  connected  with  a  labor  union  or 
functions  independently,  such  questions  as  hours  of  work, 
wages,  and  piece  rates,  arrangements  for  holidays,  schedule 
of  shifts,  night  work,  and  overtime  are  under  its  control 
and  administration.     In  fact  these  are  the  fundamental 
objects  of  collective  bargaining.  Industrial  peace  and  good- 
will are  hardly  possible  where  these  matters  are  not  the 
objects  of  collective  agreement. 

5.  Supervision    of   Living    Conditions. — In    mines    and 
plants  situated  in  remote  localities  where  the  workers  settle 
on  company  grounds,  there  is  great  need  for  the  provision 
and  proper  supervision  of  housing  and  home  conditions, 
cooperative   buying,   medical   aid,    community   sanitation, 
transportation,  educational  facilities,  church  organization, 


Shop  Committees  and  Industrial  Councils     463 

legal  aid,  financial  advice,  and  Americanization.  Workers' 
committees  acting  in  cooperation  with  management  are  able 
to  secure  many  desired  improvements  in  the  community 
life. 

6.  Administration  of  Insurance,  Pensions,  Sick  Bene- 
fits, Etc. — Committees  have  charge  of  the  administration 
of  plant  insurance,  pensions,  sick  benefits,  and  profit-shar- 
ing schemes.     Modern  progressive  personnel  policies  are 
recognizing  the  fact  that  industrial  interest  and  goodwill 
are  stimulated  by  giving  the  workers  a  voice  with  manage- 
ment in  the  planning,  financing,  and  administering  of  these 
plant  institutions. 

7.  Control  of  Plant  Discipline  and  Discharges. — Only 
recently  have  employers  begun  to  recognize  the  need  for  a 
scientific  selection,  placement,  supervision,  and  maintenance 
of  the  working  force.     Such  important  matters  as  shop 
discipline;  hiring,  promotion  and  discharge;  dilution  of 
labor ;  regulation  of  apprenticeship ;  absenteeism  and  tardi- 
ness; and  selection  of  foremen  have  been  considered  with- 
out regard  to  the  wishes  and  reactions  of  the  workers. 
Self-imposed  discipline  is  more  effective  than  discipline 
imposed  from  above.    If  the  workers  make  or  help  to  make 
shop  rules  concerning  such  matters  as  the  restriction  of 
smoking  in  the  plant,  tidiness,  cleaning  of  machines,  use 
of  lavatories  and  cloak  rooms,  standards  of  behavior  to- 
wards fellow  workmen  and  executives,  investigation  of  dis- 
charges, conditions  of  apprenticeship,  transfers,  and  promo- 
tions, an  extremely  efficient  administration  of  these  matters 
is  likely  to  result.    In  most  establishments  the  appointment 
of  foremen  is  retained  by  the  management,  although  in  a 
few  cases,  either  directly  or  indirectly,  the  workers  have 
a  voice  in  their  selection. 

8.  Cooperation  in  the  Promotion  of  Technical  Training, 
Education,  and  Publicity. — Corporations  have  become  vi- 
tally interested  in  the  improvement  of  the  technical  knowl- 
edge  and   general  education   of  their   employees.     Such 
interest  is  the  product  of  a  conviction  that  there  is  a  direct 
connection  between  knowledge  and  efficiency.    Corporation 
schools  arc  now  common.  Dissemination  of  knowledge  con- 


464     Shop  Committees  and  Industrial  Councils 

cerning  production  costs,  selling  costs,  financial  risks,  and 
other  matters  tends  to  the  promotion  of  better  understand- 
ing between  employers  and  employees.  The  plant  magazine, 
lectures,  moving  pictures,  and  study  classes  are  giving  very 
desirable  results  under  joint  administration. 

9.  Determination  of  Managerial  and  Business  Policies. — 
Thus  far  representation  plans  have  not  delegated  to  the 
workers  a  voice  in  the  formulation  and  control  of  mana- 
gerial and  business  policies.  Only  in  very  rare  cases  are 
the  workers  given  representation  on  the  board  of  directors. 
Complete  democratization  of  industry,  however,  would' 
mean  that  not  only  capital  and  management  but  also  labor 
would  have  a  voice  in  the  financial  and  business  policies 
of  the  enterprise. 

Precautions  Followed  in  Introducing  Representation 
Plans. — It  is  now  generally  conceded  that  many  shop  com- 
mittee systems  have  failed  because  necessary  precautions 
have  not  been  taken  in  the  beginning.  Although  the  plans 
have  usually  been  conceived  by  the  companies,  they  have 
been  presented  to  the  workers  for  a  vote  of  acceptance 
or  rejection.  Some  concerns  have  proceeded  more  cau- 
tiously, and  have  called  in  representatives  of  the  workers 
to  aid  in  the  formulation  of  the  system.  This  has  tended 
to  remove  suspicion  and  develop  a  sense  of  responsibility 
at  the  outset.  Preliminary  education  and  publicity  have 
been  found  necessary  to  acquaint  the  workers  and  execu- 
tives with  the  nature  and  functions  of  the  scheme,  and 
the  duties,  responsibilities,  and  privileges  which  it  provides. 
Attempts  are  made  to  adjust  the  plan  to  the  needs  and 
conditions  of  the  plant.  Employers  have  learned  that 
wage-earners  do  not  want  charity  but  justice,  and  will  react 
favorably  to  a  fair  proposal  for  participation  in  the  control 
of  industry.  Behind  such  plans,  therefore,  there  must  be 
a  sincere  desire  to  give  the  workers  a  real  voice  in  manage- 
ment and  a  willingness  to  accept  the  logical  developments 
that  follow. 

Typical  Plans  in  the  United  States. — 1.  The  Interna- 
tional Harvester  Company. — This  plan  was  adopted  in 
practically  all  of  the  company's  plants  in  1919.  Its  pur- 


Shop  Committees  and  Industrial  Councils     465 

pose  is  to  promote  mutual  understanding  and  confidence. 
To  this  end  there  is  a  joint  determination  of  policies  re- 
lating to  working  conditions,  health,  safety,  hours  of  labor, 
wages,  recreation,  education,  and  similar  matters  of  mutual 
interest.  At  each  works  adopting  the  plan  there  is  or- 
ganized a  "Works  Council"  composed  of  representatives 
of  employees  and  of  management,  the  number  for  each  side 
being  equal.  One  employee  representative  is  provided  for 
each  two  hundred  to  three  hundred  employees,  the  mini- 
mum number  being  not  less  than  five.  Foremen,  assistant 
foremen,  and  other  persons  having  power  to  hire  and  fire 
are  not  eligible  to  represent  the  workers.  The  procedure 
in  nominations  and  elections  is  similar  to  that  already  de- 
scribed. A  petition  for  recall  requires  the  signatures  of 
at  least  one-third  of  the  employees  in  a  voting  division,  and 
recall  is  decided  by  special  election,  a  majority  vote  being 
necessary  for  removal  from  office.  The  manager  of  the 
department  of  industrial  relations  is  the  chairman  of  the 
works  council.  A  tie  vote  in  the  council  may  be  referred 
to  the  president  of  the  company,  who  may  propose  a  settle- 
ment or  submit  the  case  to  the  "General  Council,"  con- 
sisting of  two  representatives  from  each  plant  as  a  mini- 
mum, or  one  member  for  each  1,000  employees,  and  an  equal 
number  of  representatives  of  management.  If  this  body 
fails  to  make  an  adjustment,  the  case  is  submitted  to  a 
single  impartial  arbitrator,  provided  the  representatives  of 
both  sides  can  agree  upon  such  a  person ;  if  no  agreement 
can  be  reached  in  the  selection  of  an  arbitrator,  employees' 
representatives  choose  one  arbitrator  and  the  president  an- 
other, and  these  two  a  third.  The  decisions  and  rulings  of 
the  general  council  or  the  arbitration  board  are  final  and 
binding.  Provisions  are  made  by  the  company  to  pay  the  ex- 
penses incident  to  the  operation  of  the  scheme,  and  the  plan 
may  be  terminated  in  any  plant  by  a  majority  vote  of  em- 
ployees concerned,  or  by  the  action  of  the  board  of  di- 
rectors. The  company  does  not  give  the  workers  a  voice 
in  the  determination  of  business  policies. 

2.  The  B.  Edmund  David  Company. — This  is  a  "fed- 
eral" scheme.     The  house  of  representatives  consists  of 


466     Shop  Committees  and  Industrial  Councils 

representatives  of  the  workers  who  are  elected  in  each  de- 
partment on  the  basis  of  one  representative  for  every 
twenty  employees.  The  heads  of  departments  and  foremen 
constitute  the  senate,  while  the  cabinet  consists  of  the 
highest  officers  of  the  company — president,  treasurer,  and 
general  manager.  Each  body  meets  separately;  the  two 
former  meeting  weekly  and  the  cabinet  when  necessary. 
Bills  may  be  initiated  either  in  the  house  or  the  senate  or 
by  the  cabinet.  To  become  a  law  a  bill  must  pass  both 
houses  and  be  approved  by  the  cabinet.  Committees  are 
created  on  ways  and  means,  press  and  publicity,  and  ap- 
peals, with  employee  representatives  in  the  majority. 
Grievances  and  disputes  that  cannot  be  adjusted  by  the  rep- 
resentatives of  both  sides  are  submitted  to  the  Board  of 
Appeals,  from  the  decisions  o£  which  a  final  appeal  may  be 
had  to  the  cabinet.  A  semimonthly  dividend,  based  upon 
improvements  in  production  and  economy,  is  provided. 
The  two  deficiencies  in  this  plan  are  that  management  re- 
tains the  veto  power,  and  no  provisions  are  made  for  joint 
deliberation. 

3.  The  Colorado  Fuel  and  Iron  Company. — The  "Col- 
orado Plan"  was  inaugurated  in  1915,  after  a  period  of  un- 
precedented industrial  strife  in  the  company's  mines  and 
plants.  District  committees  of  workers'  representatives 
are  provided  for  the  mines,  and  a  divisional  representative 
for  every  150  employees  in  the  steel  plant.  Management 
is  represented  by  a  special  industrial  representative  who 
visits  departments  regularly,  holds  interviews  with  superin- 
tendents and  the  workers'  representatives,  and  reports  his 
findings  to  the  company.  About  every  four  months  a  joint 
conference  of  representatives  of  management  and  em- 
ployees is  held,  and  once  a  year  four  joint  committees  are 
elected  at  these  sessions.  These  committees  are:  (1)  the 
committee  on  industrial  cooperation  and  conciliation,  which 
adjusts  disputes,  endeavors  to  maintain  order  and  dis- 
cipline, and  considers  conditions  of  employment;  (2)  the 
committee  on  safety  and  accidents;  (3)  the  committee  on 
sanitation,  health,  and  housing;  and  (4)  the  committee  on 
recreation  and  education.  These  committees  report  to  the 


Shop  Committees  and  Industrial  Councils    467 

joint  conferences.  If  the  Joint  Committee  on  Industrial 
Cooperation  and  Conciliation  cannot  adjust  a  dispute  or 
settle  a  grievance  satisfactorily,  it  may  select  an  umpire, 
and  if  this  method  fails,  the  case  is  submitted  for  investi- 
gation to  the  State  Industrial  Commission,  or  goes  to  ar- 
bitration. In  case  the  parties  cannot  agree  on  a  single  ar- 
bitrator, a  board  of  three  is  selected,  one  by  the  represen- 
tatives of  each  side  and  the  third  by  these  two  members; 
or  both  sides  may  consent  to  request  the  State  Industrial 
Commission  either  to  choose  the  arbitrators  or  to  decide 
the  controversy.  In  any  case  the  decison  is  final  and  bind- 
ing. The  company  surrenders  none  of  its  independence 
in  the  determination  of  general  business  policies. 

4.  The  Philadelphia  Rapid  Transit  Company. — In  the 
reorganization  of  this  company's  policies  in  1910,  the  co- 
operation of  the  employees  was  sought  through  the  es- 
tablishment of  the  Cooperative  Welfare  Association.  Under 
the  terms  of  this  arrangement  the  company  promised  that 
22  cents  out  of  every  dollar  received  in  fares  would  be  set 
aside  in  a  fund  to  be  used  for  the  payment  of  wages  to 
conductors  and  motormen,  and  that  certain  sick  benefits, 
pensions,  and  insurance  would  be  provided.  The  company 
recovered  from  its  state  of  bankruptcy,  continuous  service 
was  assured  the  public,  wages  practically  doubled  in  seven 
years,  and  over  $16,000,000  was  spent  in  new  equipment 
and  improvements. 

Under  the  supervision  of  the  National  War  Labor  Board, 
the  company  developed,  in  1918,  a  collective  bargaining 
plan,  which  is  kept  distinct  from  the  cooperative  welfare 
activities.  There  is  no  discrimination  on  account  of  union 
membership.  Differences  arising  between  management  and 
employees  are  settled  through  the  medium  of  (1)  branch 
committees,  (2)  department  committees,  (3)  general  com- 
mittees, and  (4)  a  board  of  arbitration.  The  branch  com- 
mittee of  the  employees  consists  of  two  representatives  from 
each  division  of  the  enterprise,  and  the  branch  committee 
of  the  management  consists  of  two  representatives  of  the 
company.  These  two  committees  meet  in  joint  conference 
for  consideration  of  problems  of  mutual  interest.  The 


468    Shop  Committees  and  Industrial  Councils 

employees'  department  committees  consist  of  the  branch 
representatives  in  each  department,  as  transportation,  roll- 
ing stock  and  buildings,  general  offices,  electrical,  and  ways 
departments.  These  committees  are  paralleled  by  depart- 
mental committees  for  management,  with  an  equal  number 
of  representatives,  appointed  by  the  company.  Bach  em- 
ployees' department  committee  appoints  two  of  its  repre- 
sentatives to  the  employees'  general  committee,  and  man- 
agement appoints  an  equal  number  of  representatives  to 
form  its  general  committee.  At  stated  intervals  these  two 
meet  as  the  "Joint  General  Committee." 

Local  grievances  are  considered  first  by  the  branch  com- 
mittees, and  if  these  cannot  make  a  settlement  the  question 
is  submitted  to  the  departmental  committees.  Failing  ad- 
justment, the  controversy  is  sent  to  the  general  committees, 
and  if  these  fail  the  grievance  is  submitted  to  arbitration. 
The  general  committee  for  employees  selects  one  arbitrator, 
the  general  committee  for  management  another,  and  these 
two  members  a  third.  If  these  two  cannot  agree  upon  a 
third  member,  then  the  Provost  of  the  University  of  Penn- 
sylvania, the  chairman  of  the  Public  Service  Commission, 
and  the  President  of  the  Chamber  of  Commerce  are  re- 
quested to  serve  as  additional  arbitrators.  Failing  an 
unanimous  decision,  the  judgment  of  three  of  these  five 
arbitrators  is  binding.  Under  the  general  provision  of 
the  plan  there  is  joint  consideration  of  wage  scales, 
hours  of  work,  profit-sharing,  adjustment  of  grievances, 
promotion  of  efficiency,  continuity  of  employment,  im- 
provement of  working  conditions,  discipline  and  dis- 
charge, and  the  operation  of  the  benefit  plan.  Manage- 
ment retains  in  its  own  hands  such  matters  as  the  deter- 
mination of  standards  of  entrance  to  employment,  trans- 
fers and  promotions,  technical  training,  and  the  formula- 
tion of  financial  and  business  policies. 

Organized  Labor's  Objections  to  Company  Unions. — 
Workers  are  convinced  that  shop  committees,  or  "com- 
pany unions"  as  they  are  called  by  trade  unionists,  are 
the  creation  of  the  employer  and  may  be  abandoned  by 
him  whenever  they  function  against  his  interests  or  tend 


Shop  Committees  and  Industrial  Councils     469 

to  develop  among  the  workers  a  strong  desire  for  inde- 
pendent unionism  and  control.  The  1919  convention  of 
the  American  Federation  of  Labor  passed  a  resolution  ex- 
pressing organized  labor's  objections  to  these  plant  sys- 
tems of  collective  bargaining.  These  objections  were: 

(1)  Unfair  elections  and  representation.     True  collective 
bargaining    presupposes    the    unrestricted    right    of    the 
workers  to  elect  representatives  free  from  the  company's 
influence,  but  management,  "through  campaigns  of  intimi- 
dation and  election  fraud,  load  their  company-union  com- 
mittees with  bosses,  usually  to  the  point  of  a  majority." 

(2)  No  democratic  organization  permitted.    Collective  bar- 
gaining  is   based  fundamentally  upon   free  speech,   free 
assembly,  and  free  association.    Free  and  independent  or- 
ganization and  meetings  are  impossible  under  plant  rep- 
resentation   plans,    and    this    situation,    it    is    contended, 
prevents  aggressive  action  by  the  workers.     (3)  Intimida- 
tion  of   committeemen.    It   is   further   pointed   out    that 
companies     ordinarily     discharge    in    summary     fashion 
those    committeemen    who    dare    to    make    a    stand    in 
behalf  of  the  workers.     "Being  unorganized,  the  men  are 
powerless  to  defend  their  representatives."     Committees 
thus  degenerate  into  tools  of  the  company  and  become  deaf 
to  the  interests  of  the  workers.     (4)  Expert  assistance  pro- 
hibited.   Employers  safeguard  their  interests  by  employing 
the  best  brains  available,  and  it  is  necessary  for  the  workers 
to  have  experienced  leaders  to  deal  with  these  experts. 
Under  company  unions  this  is  impassible  because  "all  asso- 
ciation with  trade  union  officials  is  strictly  prohibited." 
Thus  the  company  reserves  for  itself  a  right  which  it 
denies  to  the  workers.     (5)   Company  unions  lack  power. 
The  company  union  is  viewed  by  organized  labor  as  a  use- 
less  institution  in  establishing  effectively  desired  scales  of 
wages,   hours,   and   conditions   of  employment.     Isolated 
from  other  groups  of  organized  workers,  lacking  funds, 
supinely  obedient  to  the  company's  dictation,  the  company 
union  is  unable  to  protect  the  interests  of  the  workers.    (6) 
Company  diverts  aim.    It  is  contended  that  the  company 
diverts  the  activities  of  the  committees  and  councils  from 


470     Shop  Committees  and  Industrial  Councils 

the  real  objects  of  collective  bargaining,  such  as  wages, 
hours,  and  conditions,  and  directs  them  into  such  channels 
as  safety-first  movements,  problems  of  efficiency,  and  bene- 
fit schemes.  On  the  basis  of  these  objections  the  A.  F.  of  L. 
disapproves  and  condemns  all  such  company  unions  and 
advises  its  membership  to  refrain  from  participation 
therein.  The  right  of  collective  bargaining  through  trade 
unions  is  demanded.3 

It  should  not  be  inferred  from  the  above  that  American 
labor  organizations  are  opposed  to  plant  representation 
in  principle.  In  its  1918  convention  the  American  Federa- 
tion of  Labor  went  on  record  as  favoring  in  all  large  perma- 
nent shops  a  regular  arrangement  whereby  a  committee  of 
workers  would  meet  regularly  with  the  shop  management  to 
discuss  matters  of  production  and  other  questions,  such  a 
committee  to  carry  beyond  the  foreman  and  superintendent, 
to  the  general  manager  or  to  the  president,  any  important 
grievance  which  may  arise  over  wages,  hours,  and  condi- 
tions. But  these  committees  must  be  founded  upon  the 
right  of  the  workers  to  organize  into  trade  or  industrial 
unions  and  to  bargain  collectively  without  discrimination. 
In  other  words,  shop  committee  systems  functioning  in  con- 
junction with  independent  unionism  are  favored.4 

The  Success  of  Plant  Representation  Plans  in  the 
United  States. — Experience  with  representation  plans  in 
the  United  States  has  been  varied,  but  on  the  whole  em- 
ployers have  reported  rather  favorable  results.  Investi- 
gations show  that  many  of  these  plans  have  ceased  to. 
function,  many  others  have  functioned  only  to  a  limited 
extent,  while  a  goodly  number  have  continued  to  operate 
with  unusual  success.  Generally  speaking,  employers 
have  endorsed  the  representation  systems.  It  is  pointed 
out  that  with  few  exceptions  the  workers  have  chosen 
intelligent,  fair-minded,  and  conservative  representatives. 
In  most  cases  the  committees  seem  to  have  operated  fairly 
and  constructively.  The  schemes  have  been  lauded  as 

•Proceedings  of  the  Thirty-ninth  Annual  Convention,  1919,  p.  302. 
4  Proceedings  of  the  Thirty-eighth  Annual  Convention,  1918,  pp.  85, 
329,  330. 


Shop  Committees  and  Industrial  Councils     471 

creating  a  feeling  of  mutual  confidence,  goodwill,  co- 
operation, and  loyalty.  In  some  cases,  however,  unrest 
increased  rather  than  diminished  under  these  committee 
systems.  On  the  whole,  industrial  unrest  seems  to  have 
been  less  common  and  less  serious  where  representation 
plans  have  been  introduced  in  a  proper  spirit.  Increased 
production,  reduction  of  labor  turnover,  and  improved 
methods  of  operation  have  resulted  in  some  establishments. 
On  the  other  hand,  many  employers  condemn  such  schemes 
as  a  surrender  of  individualistic  action  in  the  control  of 
industry  and  as  a  step  toward  socialism. 

Industrial  Councils. — In  almost  every  advanced  indus- 
trial country  there  is  a  definite  movement  for  the  estab- 
lishment of  industrial  councils  functioning  in  conjunction 
with  organizations  of  labor.  In  general  these  plans  have 
taken  the  form  recommended  by  the  Whitley  Committee 
in  England.  National  councils  are  organized  to  secure  the 
largest  possible  measure  of  cooperation  and  joint  action 
between  employers  and  employees  in  matters  pertaining 
to  the  development  of  the  industry  as  a  part  of  national 
life,  and  for  the  improvement  of  conditons  of  employment 
for  all  engaged  in  the  industry  in  which  the  council  is 
created.  District  councils  consider  questions  referred  to 
them  by  the  national  council,  and  take  district  action 
necessary  to  any  agreemnt.  They  make  recommendations 
to  the  national  council,  take  action  on  questions  referred 
to  thorn  by  the  shop  or  works  committees,  cooperate  with 
the  district  councils  for  other  industries,  and  adjust  griev- 
ances and  disputes  not  settled  by  the  committees  in  the 
various  shops,  mills,  or  mines.  The  shop  or  works  com- 
mittees are  giving  the  employees  a  wider  interest  and 
a  greater  responsibility  in  plant  conditions.  They  help  in 
determining  the  conditions  under  which  men  and  women 
must  work,  enforce  regulations  and  decisions  made  by 
the  district  and  national  councils,  and  strive  to  prevent 
friction  and  misunderstanding  between  management  and 
the  employees.  Joint  representation  is  provided  for  em- 
ployers and  employees,  and,  in  some  countries,  the  public 
is  given  representation, 


472     Shop  Committees  and  Industrial  Councils 

In  Great  Britain  joint  industrial  councils  have  been  in- 
troduced successfully  in  the  building,  pottery,  basket 
making,  iron  and  steel  wire,  optical,  and  many  other  in- 
dustries. Even  city  councils  have  adopted  such  plans. 
Early  in  1919  the  German  government  inaugurated  a 
system  of  councils.  The  law  provides  that  works  councils 
(Betriebsarbeiterrat)  are  to  be  elected  in  all  establish- 
ments employing  20  or  more  persons,  whether  manual 
workers  or  salaried  employees.  In  establishments  em- 
ploying less  than  20,  but  at  least  five  persons,  a  single 
shop  steward  (Betriebsobmann),  is  elected.  In  addition 
to  the  general  works  council,  each  establishment  is  to 
have  a  workers'  council  (arbeiterrat)  and  a  salaried  em- 
ployees' council  (Angestelltenrat)  to  protect  the  interests 
of  these  two  groups.  A  special  law  of  1921  gives  the 
workers  the  right  to  information  concerning  the  financial 
policies  and  status  of  the  business,  and  delegates  of  works 
councils  have  a  seat  and  a  vote  in  boards  of  directors. 
The  structure  of  the  German  plan  is  patterned  after  the 
English  system  to  a  large  extent,  and  the  functions  of  the 
various  committees  are  similar  to  those  of  such  committees 
in  the  United  States  and  England. 

In  1921,  a  governmental  decree  in  France  created  a 
"Superior  Labor  Council,"  consisting  of  representatives 
of  employers,  employees,  the  consumers,  and  certain  other 
interests,  for  the  promotion  of  industrial  harmony.  In  the 
United  States  the  industrial  council  idea  has  gained 
ready  acceptation,  and  for  years  such  councils  have 
existed  in  many  important  trades  and  industries.  Notable 
among  the  recent  experiments  is  the  International  Joint 
Conference  Council  of  the  Commercial  and  Periodical 
Branches  of  the  Printing  Industry,  adopted  in  1919,  and 
the  council  system  in  the  United  States  Post  Office  De- 
partment, in  which  councils  have  been  provided  by  the 
welfare  department  for  clerks,  carriers,  and  other  em- 
ployees in  the  various  post  offices,  and  extended  recently 
to  include  rural  carriers  and  fourth-class  postmasters. 

Conclusions. — As  the  nineteenth  century  witnessed  a 
struggle  for  the  protection  of  the  workers,  the  twentieth 


Shop  Committees  and  Industrial  Councils     473 

century  is  ushering  in  a  definite  movement  for  larger 
control  of  industry  by  wage-earners.  The  demands  for 
nationalization  in  many  countries,  such  as  the  United 
States,  Great  Britain,  Germany,  and  France  are  the  artic- 
ulate expression  of  a  deepening  desire  on  the  part  of  the 
workers  for  this  control.  The  introduction  of  shop  com- 
mittee systems  does  not  necessarily  imply  true  democrati- 
zation of  industry,  since  management  has  retained  the 
veto  power  and  does  not  permit  the  workers  to  share  in 
the  general  control  of  the  enterprise.  It  is  difficult  to 
determine  the  extent  to  which  the  workers  desire  the 
responsibilities  of  management;  at  times  it  appears  that 
they  wish  merely  to  have  a  voice  in  the  determina- 
tion of  wages,  hours  of  work,  the  conditions  of  employ- 
ment, and  the  adjustment  of  minor  grievances.  Signs 
are  not  lacking,  however,  that  a  fuller  measure  of  control 
is  desired  and  that  a  thorough  democratization  of  in- 
dustry is  the  ultimate  goal.  One  thing  is  certain:  We 
need,  and  must  eventually  achieve,  a  greater  degree  of 
democratic  control  than  is  at  present  afforded  in  many  of 
our  great  industries. 


SELECTED  REFERENCES 

BASSET,  W.  R.,  When  the  Workmen  Help  Tou  Manage,  1919. 

BLOOMFIELD,  MEYER,  Management  and  Men,  1919,  pp.  546-571. 

COLE,  Q.  D.  H.,  Self-Government  in  Industry,  1917. 

COMMONS,  J.  R.  (editor),  Trade  Unionism  and  Labor  Problems, 
revised  edition,  1921,  Chaps.  XXI-XXIV. 

COMMONS/ J.  R.,  Industrial  Goodwill,  1921. 

COMMONS,  J.  R.,  Industrial  Government,  1922. 

GLEASON,  A.  H.,  Whitley  Councils,  Survey,  42 :27-28,  75-77,  109- 
111,  1919. 

GREAT  BRITAIN,  MINISTRY  OF  LABOR,  Report  of  an  Inquiry  as 
to  Works  Committees,  1919. 

ILLINOIS  MANUFACTURERS'  ASSOCIATION,  Employees'  Representa- 
tion Plans  in  Illinois  Industries,  1922. 

KINO,  W.  L.  M.,  Industry  and  Humanity,  1918,  Chaps.  X-XII. 

I.KIT. 'ii ,  JOHN,  Man  to  Man,  1919. 

MEEKER,  ROYAL,  Employees'  Representation  in  Management  of 
Industry,  Monthly  Labor  Review,  10:1-14,  Feb.,  1920, 


474     Shop  Committees  and  Industrial  Councils 

NATIONAL  INDUSTRIAL   CONFERENCE   BOARD,  NEW  YORK   Cnr, 

Works  Councils  in  the  United  States,  1919;  Experience  vrith 

Works  Councils  in  the  United  States,  1922. 
RENOLD,  C.  G.,  Workshop  Committees,  Survey,  41:1-8,  Oct.  5, 

1918. 

ROCKEFELLER,  J.  D.,  JR.,  The  Personal  Relation  in  Industry,  1917. 
SIMONS,  A.   M.,  Personnel  Relations  in  Industry,  1921,   Chaps. 

XIV,  XVII-XIX. 

STODDARD,  W.  L.,  The  Shop  Committee,  1919. 
STUDENSKY,   PAUL,   Shop   Committees   and  Industrial   Councils, 

1919. 
TEAD,  ORDWAY,  AND  METCALF,  H.  C.,  Personnel  Administration, 

1920,  Chaps.  XXVIII,  XXIX,  XXXIV  and  XXXV. 
THOMAS,  J.  H.,  When  Labor  Rules,  1920. 
UNITED   STATES   BUREAU   OF  LABOR    STATISTICS,   Bulletins  237 

(1917),  255  (1919). 
UNIVERSITY   OF   MANCHESTER,   Labor  and  Industry,   1920,   pp. 

191-212. 
WHITLEY,   J.   H.,   Works  Committees   and  Industrial  Councils, 

Labor  and   Industry,  University  of  Manchester,  1920,  pp. 

1-25. 
WHITNEY,   A.   B.,   Development   of   Shop    Committee   Systems, 

Monthly  Labor  Review,  9 :225-236,  Nov.,  1919. 
WOLFE,  A.  B.,  Works  Committees  and  Joint  Industrial  Councils, 

1919. 


CHAPTER  XX 

PERSONNEL  ADMINISTRATION 

Scientific  Management. — Production  is  the  major  func- 
tion of  industry  and  the  basis  of  life ;  there  can  be  no  dis- 
tribution and  consumption  of  wealth  where  there  is  no 
production.  No  matter  how  ideal  may  be  the  theoretical 
system  of  distribution,  it  is  valueless  unless  there  is  some- 
thing to  be  distributed;  Russian  communists  have  dem- 
onstrated this  truth  in  the  failure  of  their  great  experi- 
ment. Lenin  embraced  scientific  management  as  a  funda- 
mental step  in  the  attempt  to  rescue  Russian  communism 
from  disaster.  Scientific  management,  as  taught  by  Tay- 
lor, Gantt,  Emerson,  and  other  efficiency  experts,  en- 
deavors to  ascertain  by  means  of  accurate  industrial  anal- 
ysis the  conditions  that  underlie  efficiency  in  production, 
and  to  formulate  the  scientific  laws  that  govern  in- 
dustry. Empiricism  and  trial  and  error  are  to  give  place 
to  scientific  laws  in  industrial  organization  and  operation. 
It  is  contended  that  production  and  distribution  are  gov- 
erned by  immutable  natural  laws  which  operate  inde- 
pendently of  human  judgment.  The  conditions  that 
underlie  these  laws  can  be  discovered  objectively;  such 
discovery  will  protect  the  workers  from  speeding  and 
exhaustion,  introduce  just  treatment  for  individual 
workers,  and  increase  the  skill  and  efficiency  of  the  work- 
ing force.  The  scientific  method  of  attaining  these  ob- 
jectives is  time  and  motion  study.  This  study  is  not  to 
be  used  merely  to  set  the  task  and  rate  of  efficiency,  but  to 
discover  the  reasonable  amount  of  time  it  should  take  to 
perform  a  given  task,  with  due  regard  to  the  material 
and  human  factors  involved.  The  differential  piece-rate 
method  of  industrial  remuneration  is  accepted  as  most 
conducive  to  justice  and  output. 

475 


476  Personnel  Administration 

Scientific  management  has  not  accomplished  the  great 
results  that  its  prophets  claimed  for  it.  This  may  be  ac- 
counted for  in  several  ways.  (1)  Almost  insurmountable 
difficulty  has  been  experienced  in  measuring  accurately 
time  and  motion  in  their  relation  to  objective  tasks.  Hu- 
man beings  are  the  variable  factor  in  production  and  dis- 
tribution, and  it  is  practically  impossible  to  predetermine 
their  reactions.  Men  do  not  always  work  with  the  same 
speed  and  accuracy.  Moreover,  in  the  measurement  of 
these  objective  facts  human  judgment  is  not  infallible, 
and  selfishness,  prejudice,  and  favoritism  have  great  in- 
fluence. (2)  Human  ingenuity  has  not  yet  been  success- 
ful in  determining  the  relative  specific  productivity  of  the 
various  agencies  in  production — land,  labor,  capital,  and 
the  enterpriser — so  the  just  distribution  claimed  by  scien- 
tific management  is  impossible.  (3)  Scientific  manage- 
ment as  applied  in  a  great  many  establishments  has  been 
merely  a  ruse  of  the  employer  to  speed  up  the  workers, 
and  has  resulted  in  exhaustion  and  fatigue.  (4)  Scien- 
tific management  has  been  undemocratic  in  purpose  and 
administration.  It  substitutes  the  individual  for  the  col- 
lective bargain,  and  weakens  the  competitive  bargaining 
power  of  the  individual  workman.  Moreover,  the  whole 
scheme  originates  with  and  is  administered  by  the  em- 
ployer. (5)  Scientific  management  has  been  justly  criti- 
cized for  its  tendency  to  reduce  the  mass  of  industrial 
workers  to  the  status  of  the  semiskilled,  since  they  con- 
stantly react  in  machine-like  fashion  under  the  direction 
of  the  stop  watch.  It  seeks  constantly  to  adjust  the 
worker  to  the  job,  and  never  the  job  to  the  worker,  results 
in  monotonous  specialization,  and  stifles  self-expression. 
For  these  and  other  reasons  organized  labor  has  been 
unalterably  opposed  to  Taylorism. 

The  Science  of  Personnel  Administration. — The  old 
scientific  management  failed  because  it  was  not  founded 
upon  a  full  appreciation  of  the  importance  of  the  human 
factor  in  industry.  It  was  left  for  the  new  science  of 
personnel  management  to  discover  and  evaluate  properly 
the  human  elements  in  production  and  distribution.  Low 


Personnel  Administration  477 

production  is  caused  not  merely  by  faulty  organization 
and  direction  of  materials  and  machines,  but  by  un- 
scientific management  of  men.  Industrial  managers  have 
understood  the  mechanical  and  material  forces  of  pro- 
duction, but  are  only  just  beginning  to  comprehend  the 
fact  that  production  is  conditioned  no  less  by  physiologi- 
cal and  psychological  factors.  Personnel  administration 
has  been  defined  as  the  "direction  and  coordination 
of  human  relations  of  any  organization  with  a  view  to 
getting  the  maximum  necessary  production  with  a  mini- 
mum of  effort  and  friction,  and  with  proper  regard  for 
the  genuine  well-being  of  the  workers."  1  The  new  science 
of  management,  or  human  engineering  in  industry,  is 
built  on  a  full  appreciation  of  the  relationship  that  exists 
between  maximum  production,  on  the  one  hand,  and  the 
satisfaction  of  the  basic  instincts  of  self-preservation, 
self-expression,  self-respect,  loyalty,  love  of  homemaking, 
worship,  and  play,  on  the  other.  Personnel  supervision 
requires  careful  thought  and  sympathetic  understanding; 
it  is  one  thing  to  know  machines,  but  distinctly  another  to 
know  men.  "Heretofore,"  says  Mr.  John  D.  Rockefeller, 
Jr.,  "the  chief  executives  of  important  industrial  corpora- 
tions have  been  selected  largely  because  of  their  capacity 
as  organizers  or  financiers.  The  time  is  rapidly  coming, 
however,  when  the  important  qualification  for  such  posi- 
tions will  be  a  man's  ability  to  deal  successfully  and 
amicably  with  labor."2 

For  the  performance  of  such  a  task  many  corporations 
have  already  created  the  personnel  department,  under  the 
direction  of  a  personnel  or  labor  manager. 

The  Personnel  Department  and  its  Functions. — Pro- 
gressive employers  provide  safe,  healthful  places  of  em- 
ployment, machinery,  tools,  methods,  and  processes  that 
conduce  to  rapid  work  of  good  quality,  and  reduce  to  a 
minimum  the  hazards  to  health  and  body;  protection 
against  contagious  or  communicable  diseases;  medical, 
surgical  and  dental  services  when  no  other  agency  pro- 

1  Tead  and  Motcalf,  Personnel  Administration,  p.  2. 
1  The  Personal  Relation  in  Industry,  p.  7. 


478  Personnel  Administration 

vkies  them;  medical  and  dental  prophylaxis;  competent, 
sympathetic  supervision  that  recognizes  both  the  physio- 
logical and  the  psychological  elements  in  production; 
equipment  designed  to  make  a  proper  adjustment  of  the 
worker  to  the  job,  taking  into  account  temperamental, 
physical,  and  industrial  qualifications;  special  facilities 
ior  training  new  and  inexperienced  employees,  and  for 
preparing  experienced  workers  for  more  responsible  posi- 
tions in  the  plant.  Moreover,  many  progressive  corpora- 
tions provide  proper  nourishment  at  cost,  or  at  least  at 
a  reasonable  charge,  during  the  working-day ;  time  and 
facilities  for  rest  and  recreation,  especially  where  \vork 
is  heavy,  monotonous,  and  likely  to  result  in  overexertioo* 
and  fatigue;  educational  campaigns  that  acquaint  the 
worker  with  methods  of  keeping  well  and  avoiding  in- 
juries ;  opportunities  for  transfer  and  promotion,  and  im- 
provement of  technical  knowledge;  assistance  in  adjust- 
ing social  and  financial  difficulties;  disability  funds,  pen- 
sions, and  group  insurance;  and  instruction  in  the  value 
of  thrift,  domesticity,  morality,  and  sobriety.  The  varied 
activities  incident  to  the  execution  of  such  a  comprehen- 
sive program  are  entrusted  to  the  various  subdivisions  of 
the  personnel  department ;  namely,  employment,  research, 
health,  safety,  welfare,  education,  and  joint  control.  Edu- 
cational methods  are  discussed  in  the  following  chapter, 
while  joint  control  has  already  been  considered  in  con- 
nection with  shop  committees. 

Employment  Policies  and  Methods. — No  phase  of  indus- 
trial relations  has  commanded  more  attention  recently 
than  the  problem  of  hiring  and  firing.  Enormous  waste 
is  incurred  by  careless  methods.  It  is  now  recognized  by 
progressive  concerns  that  intelligent  selection  of  employ- 
ees cannot  be  made  at  the  factory  gate,  nor  by  foremen 
who  are  trained  to  get  production  but  not  to  understand 
the  selection  and  placement  of  men.  The  employment 
manager  in  modern  industry  is  a  specialist  in  choosing 
workers  and  in  placing  them  after  they  have  been 
selected.  His  office  is  attractive,  and  instead  of  having 
to  stand  in  line  at  the  factory  gate,  applicants  now  can 


Personnel  Administration  479 

test  comfortably  while  waiting  their  turn  for  the  confi- 
dential interview  with  the  employment  manager.  The 
methods  of  labor  recruitment  are  improved  greatly 
in  the  up-to-date  establishment.  Promiscuous  adver- 
tising for  employees  through  the  medium  of  the  daily 
newspaper,  private  fee-charging  agencies,  labor  scouting, 
and  the  "men  wanted"  sign  bring  to  the  plant  a  mass  of 
workmen  far  in  excess  of  the  requirements  of  the  plant 
and  for  the  most  part  lacking  the  necessary  qualifications 
for  the  jobs  available.  The  well-managed  employment 
office  finds  better  sources  of  labor  supply  in  the  friends 
of  present  employees,  public  school  or  high  school  gradu- 
ates, public  employment  offices,  the  headquarters  of  trade 
unions,  and  the  community  canvass. 

Care  is  exercised  to  determine  whether  the  applicants 
are  fitted  for  the  available  positions ;  physical,  mental,  and 
moral  qualifications,  trade  knowledge  and  skill,  age,  sex, 
nationality,  and  experience,  are  among  the  facts  ascer- 
tained. Application  blanks  are  filled  out,  and  intelli- 
gence, trade,  and  special  ability  tests  are  used  for  rating 
the  worfcer,  A  systematic  attempt  is  made  to  introduce 
tbe  worker  to  the  foreman  and  fellow  employees,  and  to 
explain  the  shop  rules,  practices,  and  conveniences,  and 
the  company's  policy.  These  instructions  are  sometimes 
Accompanied  by  a  tour  of  the  plant,  all  of  which  serves 
to  dispense  with  the  feeling  of  strangeness  that  so  often 
accounts  for  labor  turnover.  Efforts  are  made  to  follow 
up  the  employee  and  to  ascertain  his  progress.  In  this 
way  mistakes  in  selection  and  placement  are  corrected 
mid  workers  arc  shifted  to  the  jobs  they  can  fill  best. 

Job  Analysis  and  Specification. — Proper  selection  and 
placement  of  employees  are  dependent  upon  accurate 
knowledge  concerning  the  jobs  that  are  to  be  filled. 
Such  information  is  made  available  through  job  analysis 
and  job  specification.  Job  analysis  examines  the  exaet 
nature  of  the  positions  in  the  plant,  to  find  out  the  con- 
ditions under  which  the  jobs  are  done,  and  the  physical, 
mental  and  moral  requirements  for  their  successful  exe- 
cution. The  old  scientific  management  made  the  mistake 


480  Personnel  Administration 

of  overemphasizing  objective,  material  facts  to  the  al- 
most total  exclusion  of  human  considerations  involved 
in  the  performance  of  the  task.  Job  analysis  avoids  this 
mistake  by  studying  not  only  the  requirements  of  the 
job,  but  also  its  effect  upon  the  physical  and  mental  well- 
being  of  the  worker  and  the  relation  of  his  qualifications 
to  its  performance.  In  other  words,  there  is  careful  co- 
ordination of  the  human  and  the  material  elements  that 
are  to  be  applied  in  production.  This  promotes  industrial 
efficiency,  contentment,  and  goodwill.  Misplacement  of 
personnel  results  in  discontent,  inefficiency,  and  labor 
turnover.  The  job  analysis  furnishes  information  con- 
cerning the  type  of  machine  used  in  the  performance  of 
the  work,  the  nature  of  the  equipment  to  be  handled,  the 
availability  of  materials,  necessary  motions,  posture  of  the 
body  while  at  work,  time  element,  quality  of  the  product, 
the  quantitative  character  of  the  output,  remuneration,  and 
the  opportunities  for  advancement.  These  and  other  nec- 
essary data  are  listed  in  the  job  specification  sheet  and 
filed  in  the  employment  office. 

Transfers  and  Promotions. — Advancement  and  promo- 
tion are  an  essential  part  of  any  successful  personnel  pro- 
gram, since  the  best  type  of  workers  will  be  reluctant 
to  remain  in  any  plant  in  the  absence  of  opportunities 
for  the  improvement  of  their  economic  status.  Continu- 
ous employment  on  one  job  becomes  monotonous  even 
to  the  most  willing  worker.  The  desire  for  variety  is 
instinctive  in  every  normal  human  being.  Transferring 
an  employee  from  one  job  to  another  relieves  him  of 
nervous  tension  and  yields  the  double  advantage  of  a 
greater  volume  of  output  for  the  employer  and  greater 
interest  and  mental  stimulation  for  the  employee.  Rest- 
lessness, instability  and  inefficiency  are  evidences  that 
transfer  should  be  effected,  but  care  should  be  exercised 
in  making  an  adjustment  between  the  worker  and  the 
new  job. 

Promotion  is  a  more  progressive  form  of  transfer  and 
consists  not  only  of  a  change  to  a  superior  position  but 
also  of  additional  remuneration.  Industrial  experience 


Personnel  Administration  481 

has  shown  that  if  the  employees  are  afforded  ample  op- 
portunity for  advancement,  present  positions  are  likely  to 
be  less  irksome  and  general  efficiency  of  the  workers  in- 
creased. Transfer  is  sometimes  used  as  a  means  of  dis- 
tributing the  employee  force  where  departmental  needs 
are  greatest.  Recognizing  the  relation  that  exists  be- 
tween transfer  and  promotion,  on  the  one  hand,  and  a 
stabilized,  cooperative,  and  efficient  working  force,  on  the 
other,  progressive  concerns  have  provided  within  the 
personnel  department  adequate  means  for  effecting  trans- 
fers and  promotions  at  the  proper  time.  The  employment 
department  assumes  the  responsibility  for  the  collection  of 
data  regarding  the  opportunities  for  transfer  and  promo- 
tions within  the  various  departments  and  for  ascertain- 
ing the  special  qualifications  and  merits  of  individual 
workers.  A  safeguard  is  thereby  provided  against  indis- 
criminate hiring  and  discharging  of  employees.  Under 
this  plan  all  responsibility  rests  with  the  personnel  or  em- 
ployment department,  the  foremen  participating  only  to 
the  extent  of  making  recommendations. 

Grievances  and  Discharges. — Much  of  the  unrest  and 
friction  in  industrial  relations  develop  from  the  fact  that 
employers  frequently  disregard  or  fail  to  appreciate  fully 
the  complaints  and  grievances  of  employees.  Charges  of 
favoritism,  discrimination,  unfair  treatment,  mistakes  in 
the  pay  envelope,  and  other  complaints  may  seem  trivial 
to  the  employer  but  very  serious  to  the  workers.  The 
deaf  ear  that  is  often  turned  to  complaining  employees 
is  largely  responsible  for  the  growth  of  a  feeling  of  indus- 
trial injustice,  suspicion,  mistrust,  and  class  hatred.  Not 
infrequently  men  are  discharged  for  causes  that  to  them 
seem  insignificant,  and  often  the  reasons  for  dismissal  are 
not  clear  or  not  known  at  all.  The  absolute  right  to  hire  and 
fire  in  modern  industry  bas  been  exercised  autocratically, 
especially  when  delegated  to  foremen  who,  because  of 
favoritism,  differences  in  political  and  religious  views, 
personal  jealousy,  or  a  feeling  of  superiority,  discharge 
workers  indiscriminately  without  even  attempting  to  as- 
sign any  cause  or  to  justify  the  action  to  the  worker.  It 


482  Personnel  Administration 

ig  not  sufficient,  therefore,  for  managers  to  refer  com- 
plaints and  grievances  to  the  foremen.  Some  other  agency 
of  adjustment  must  be  provided.  Either  the  manager 
must  provide  regular  hours  for  hearing  such  cases,  or 
the  responsibility  must  be  placed  upon  the  employment  or 
personnel  department.  There  is  a  growing  tendency  in 
Europe  and  the  United  States  to  delegate  such  matters 
to  joint  committees  composed  of  representatives  of  man- 
agement and  employees.  Whatever  method  may  be 
introduced,  it  is  commonly  agreed  that  channels  of  com- 
munication between  management  and  the  workers  should 
always  be  open.  In  no  other  way  can  even  a  semblance 
of  democratic  administration  of  industry  be  assured  and 
industrial  peace  and  goodwill  be  promoted.  An  efficient 
personnel  department  does  much  to  make  the  worker 
feel  that  he  is  getting  a  square  deal,  and  this  is  the  genesis 
of  successful  industrial  management.  Without  a  con- 
tented personnel,  productive  efficiency  is  impossible. 

In  considering  the  problem  of  labor  turnover  and  other 
evidences  of  a  dissatisfied  personnel,  employers  have  dis- 
covered that  a  great  deal  of  valuable  information  and  in- 
teresting sidelights  concerning  their  employment  policies 
and  supervision  can  be  obtained.  Provision  is  often  made, 
therefore,  for  interviews  with  all  employees  who  are  leav- 
ing the  service  of  the  company,  whether  voluntarily  or 
because  of  discharge.  Only  in  this  way  is  it  possible  to 
ascertain  whether  a  worker  has  been  justly  or  unjustly 
dismissed,  to  discover  the  causes  of  unrest  among  the 
working  force,  and  to  formulate  successful  employment 
methods.  Such  employees  are  not  given  their  final  pay 
until  there  has  been  an  interview  with  the  employment 
manager,  or  some  other  official  representative  other  than 
the  workers'  immediate  superior  who  ordered  the  dis- 
charge. More  and  more  employers  are  being  convinced 
that  "it  is  just  as  good  business  policy  to  have  employees 
who  leave  the  firm  go  away  thinking  well  of  the  company 
as  it  is  to  see  that  customers  remain  kindly  disposed  to- 
ward the  company."3  It  is  frequently  found  that  de- 

•Wm.  M.  Leiserson,  Monthly  Labor  Eeview,  October,  1919,  p.  215. 


Personnel  Administration  483 

sirable  workmen  leave  because  of  dissatisfaction  with  the 
determination  and  methods  of  remuneration,  hours  of 
labor,  and  conditions  of  employment.  To  these  matters  the 
personnel  department  gives  careful  attention. 

Health  Measures  for  Employees. — Industrial  medicine 
is  "the  theory  and  practice  of  medicine  applied  to  the 
purpose  of  preventing  and  alleviating  sickness  and  injury 
among  industrial  workers  in  order  that  they  may  enjoy 
the  benefits  of  continuous  productive  employment. "  4  It 
embraces  almost  every  kind  of  medical  practice,  and  is 
an  important  phase  of  the  larger  field  of  welfare  work. 
Welfare  work,  as  applied  to  industry,  generally  refers  to 
any  provision  for  the  intellectual  or  social  comfort  and 
improvement  of  the  workers,  which  is  not  a  necessary 
part  of  industrial  provisions  nor  required  by  legislation. 

In  order  to  safeguard  the  health  of  the  workers  pro- 
gressive companies  have  introduced  medical  departments, 
with  industrial  surgeons  and  a  staff  of  nurses  and  atten- 
dants, the  functions  of  which  are:  (1)  to  conduct  examina- 
tions of  employees  at  the  time  of  hiring  and  at  such  sub- 
sequent intervals  as  are  deemed  necessary;  (2)  to  give 
immediate  attention  to  industrial  accidents;  (3)  to  ad- 
vise and  examine  employees  in  cases  of  sickness;  (4)  to 
formulate  and  supervise  sanitary  measures;  and  (5)  to 
promote  general  health  education  among  employees.  The 
absence  of  such  measures  often  means  the  loss  of  health 
or  life  to  the  workers  and  a  heavy  financial  loss  to  the  com- 
pany. 

Organized,  labor  is  inclined  to  oppose  physical  examina- 
tions on  the  ground  that  they  deprive  many  persons  of 
employment,  infringe  upon  the  worker's  personal  liberty, 
and  may  be  used  as  a  means  of  blacklisting  and  discrim- 
inating against  members  of  trade  unions.  Moreover,  it  is 
contended  that  such  information  is  of  a  professional 
nature  and  does  not  belong  in  a  business  or  industrial 
establishment.  It  is  likely  that  such  abuses  arise,  but 
this  is  not  sufficient  reason  for  rejecting  the  constructive 
principle  underlying  such  health  measures.  The  employee 

•U.  8.  Public  Health  Service,  Bulletin  No.  99,  p.  5. 


484  Personnel  Administration 

may  benefit  greatly  from  the  initial  and  periodical  exam- 
inations. He  is  informed  of  physical  deficiences  of  which 
he  may  never  have  been  aware ;  the  expense  of  remedying 
these  weaknesses  is  often  shifted  to  the  employer;  he  is 
given  tasks  for  which  he  is  physically  fitted,  thereby  being 
protected  from  overstrain  and  fatigue;  he  has  the  as- 
surance that  he  is  measurably  safeguarded  against  con- 
tagious disease;  and  he  is  made  to  feel  his  employer's 
interest  in  the  welfare  of  the  workers.  Investigation  has 
shown  that  only  about  3  per  cent  of  the  applicants  are 
rejected,  while  the  other  97  per  cent  have  benefited 
greatly  by  this  constructive  policy  of  progressive  cor- 
porations. 

Precautionary  measures  are  taken  not  only  in  selecting 
employees,  but  also  in  safeguarding  the  physical  welfare 
of  the  entire  working  force.  Periodic  rests  during  the 
day  are  provided  to  relieve  the  strain  and  to  break  the 
monotony  of  close,  exacting  work.  Where  employees  are 
engaged  in  unusually  heavy  or  nerve-trying  work,  shifts 
are  arranged  or  transfers  are  provided,  in  order  to  rest 
the  brain  and  muscles  of  the  workers.  Sometimes,  light 
refreshments  are  served  in  the  middle  of  the  forenoon 
.and  afternoon,  or  brief  periods  of  vigorous  recreation 
are  provided.  Many  concerns  give  their  employees  annual 
vacations,  or,  in  case  of  illness,  extended  periods  of  rest 
on  part-  or  full-time  pay.  Care  is  also  taken  to  prevent 
sick  or  injured  workers  from  returning  to  work  pre- 
maturely. Stabilization  of  the  working  force  and  in- 
creased efficiency  are  among  the  results  of  these  pro- 
tective activities.  The  expense  is  not  so  great  as  many 
employers  have  imagined.  The  cost  of  conducting  phys- 
ical examinations  is  about  one-third  the  total  cost  of 
running  the  medical  or  health  department.  A  study  of 
forty-one  large  factories  having  medical  supervision 
showed  that  the  total  expense  of  all  medical  service,  ex- 
clusive of  compensation  for  injuries,  was  $1.88  per  em- 
ployee per  year,  about  62  cents  of  which  in  each  case 
covered  the  cost  of  examination.  In  some  establishments 


Personnel  Administration  485 

the  cost  of  examining  employees  amounts  to  about  $1.00 
per  position  per  year.5 

Comforts  and  Conveniences. — Health  measures  and 
physical  comforts  and  conveniences  are  closely  associated 
in  industry.  Facilities  for  promoting  physical  comfort  for 
employees  in  mercantile  and  industrial  establishments  in- 
clude good  heating,  lighting,  and  ventilating  systems; 
cold  and  pure  drinking  water;  washing-up,  locker  and 
dressing  room  equipment;  lunch  rooms  and  restaurants; 
and  devices  for  ease  at  work  or  during  pauses  in  the 
processes.  Impure  air,  excessive  heat  and  humidity,  and 
extremes  of  temperature  cause  lassitude,  headache,  rest- 
lessness, and  general  discomfort  among  employees.  .Im- 
proper or  inadequate  lighting  facilities  cause  headaches 
and  other  effects  of  eyestrain,  increase  the  danger  of  acci- 
dents, and  affect  unfavorably  both  the  quality  and  the 
quantity  of  output.  Employers,  recognizing  the  many 
dangers  to  health  in  impure  water,  provide  pure  water 
and  clean  drinking  facilities.  Either  voluntarily  or  under 
the  compulsion  of  law,  many  firms  now  install  sufficient 
washing-up  facilities,  individual  lockers,  rest  rooms 
and  dressing  rooms,  especially  for  female  employees.  Clean, 
attractive  lunch  rooms,  restaurants  or  cafeterias  furnish 
wholesome  food  at  reasonable  prices  in  the  up-to-date 
establishment.  Even  where  there  are  no  legal  require- 
ments, firms  are  now  furnishing  seats  to  provide  relaxation 
while  at  work ;  this  is  especially  beneficial  for  women  em- 
ployees who  may  be  injured  by  prolonged  standing. 
These  improvements  are  wise  economy;  they  increase 
efficiency. 

The  Safety-First  Movement. — No  phase  of  personnel 
administration  has  attracted  so  much  attention  and 
achieved  greater  results  than  the  safety  movement.  It 
was  not  until  1906  that  the  first  exhibit  of  safety  devices 
and  appliances  in  the  United  States  was  held,  under  the 
auspices  of  the  New  York  Institute  for  Social  Service.  In 

•W.  I.  Clark,  Physical  Examination  and  Medical  Supervision  of 
Factory  Employee*,  p.  3. 


486  Personnel  Administration 

the  following  year  the  American  Museum  of  Safety  was 
organized,  and  in  1912  a  small  body  of  engineers  meeting 
in  Milwaukee  instituted  the  National  Safety  Council,  with 
headquarters  at  Chicago,  to  carry  on  a  general  campaign 
against  accidents.  Ever  since,  this  organization  has  as- 
sumed the  leadership  of  the  movement  for  "safety-first." 
Although  it  was  ridiculed  and  greeted  with  "it  can't 
be  done,"  the  council,  within  four  years,  included  1,400 
representatives  from  3,293  firms,  employing  over  4,500,000 
workers.  By  1922  there  were  4,000  mombers,  operating 
8,000  industrial  plants  and  employing  more  than  7,000,000 
workers.  The  council  is  a  cooperative,  noncommercial, 
nonprofit-making  organization,  devoted  to  the  prevention 
of  both  industrial  and  public  accidents  and  the  main- 
tenance of  the  health  of  industrial  workers  throughout 
the  country.  It  contends  that  at  least  75  per  cent  of  all 
accidental  deaths  and  serious  injuries  in  industry  can  be 
eliminated,  at  a  saving  of  hundreds  of  millions  of  dollars 
in  wages  to  the  workers  and  in  costs  of  production  to 
management,6 

The  United  States  has  taken  the  lead  for  safety  in 
industry,  and  some  remarkable  achievements  have  been 
recorded  by  industrial  concerns  in  this  country.  Every 
accident  indicates  the  presence  of  defective  materials,  ma- 
chines, or  men,  or,  more  commonly,  a  combination  of 
deficiencies  in  all  these  productive  factors.  American  ex- 
perience suggests  that  many  of  these  accidents  are  pre- 
ventable. Prevention  is  the  combined  task  of  the  safety 
engineer,  who  is  now  an  essential  part  of  the  personnel 
of  progressive  corporations,  the  whole  executive  force, 
and  the  workers.  It  has  been  estimated  that  65  per  cent 
of  accidental  deaths  in  industry  are  preventable  by  proper 
safety  methods;  24  per  cent  by  necessary  precaution  on 
the  part  of  the  workers;  while  11  per  cent  are  the  un- 
avoidable risks  of  the  trade. 

The  experience  of  the  United  States  Steel  Corporation 
shows  that  the  serious  and  fatal  accidents  in  its  plants 
are  now  only  about  one-half  what  they  were  in  1906, 

•National  Safety  Council,  Saving  Men  and  Money,  pp.  1-3. 


Personnel  Administration  487 

'and  that  between  that  year  and  1920  approximately  26,000 
men  were  saved  from  serious  or  fatal  injury.  The  total 
number  of  disabling  accidents — those  that  cause  loss  of 
time  of  more  than  the  balance  of  the  working  turn — have 
been  reduced  in  some  instances  fully  97  per  cent.  Within 
eight  years  $36,000,000  was  spent  for  sanitation,  safety, 
and  welfare.  Up  to  1920  more  than  $10,000,000  had  been 
spent  in  providing  safeguards  and  correcting  conditions 
responsible  for  accidents.  These  expenditures  were  con- 
sidered among  the  best  investments  ever  made  by  the 
company.  Up  to  September,  1920,  more  than  35,000  em- 
ployees had  served  on  safety  committees,  and  at  that 
time  more  than  7,000  were  performing  these  duties,  in 
addition  to  117  safety  engineers  and  supervisors  who 
devote  their  entire  time  to  accident  prevention  and  im- 
provement of  conditions  of  work.  The  Illinois  Steel  Com- 
pany, the  International  Harvester  Company,  the  Raritan 
Copper  Company,  and  many  others  have  reported  a  re- 
duction of  over  80  per  cent  in  accidents,  while  the  Beth- 
lehem Steel  and  other  companies  have  reported  a  65  per 
cent  reduction,  through  the  introduction  of  safety  depart- 
ments. 

Many  years  of  experience  with  safety-first  movements 
in  this  country  indicate  that  45  per  cent  of  the  results 
in  reducing  accidents  have  been  obtained  through  effective 
organization,  including  a  proper  attitude  on  the  part  of 
management  and  officials,  safety  committees,  and  inspec- 
tion by  workmen;  30  per  cent  through  educational 
methods,  such  as  instruction  of  employees,  prizes,  signs 
and  bulletins,  and  lectures ;  and  25  per  cent  by  safeguards, 
including  safety  devices  built  about  machines,  proper 
lighting  systems,  and  cleanliness.  Workers'  safety  com- 
mittees meet  at  frequent  intervals,  make  inspections  of 
the  plant  at  stated  periods,  and  submit  suggestions  for 
improvements.  The  Chicago  Northwestern  Railroad  Com- 
pany found  that  during  the  first  three  years  of  its  organ- 
ized safety  work  the  employees'  committee  had  reported 
6,000  points  of  danger;  that  87  per  cent  of  their  recom- 
mendations were  practical  and  had  been  adopted. 


488  Personnel  Administration 

Organized  safety  work  yields  benefits  to  the  employer 
as  well  as  to  the  employees.  Such  work  keeps  the  organ- 
ization intact,  thereby  increasing  production  and  reducing 
manufacturing  costs;  it  avoids  the  losses  incurred  in 
breaking  in  new  employees  to  take  the  place  of  injured 
ones ;  it  saves  medical  fees  and  compensation  awards ;  and 
it  conduces  to  more  harmonious  industrial  relations  by 
giving  the  workers  a  part  in  industrial  management  and 
assuring  them  of  the  employers'  interest  in  their  welfare. 
A  study  of  a  large  number  of  concerns  indicates  that  the 
compensation  costs  for  companies  having  no  organized 
safety  movement  are  from  four  to  five  hundred  per  cent 
greater  than  for  concerns  having  such  a  movement.  The 
benefits  accruing  to  the  workers  cannot  be  measured  in 
dollars  and  cents. 

Recreation. — Employers  have  been  reluctant  to  assume 
direction  of  the  leisure-time  activities  of  their  employees, 
because  this  step,  even  more  than  other  phases  of  per- 
sonnel and  welfare  work,  is  open  to  the  charge  of 
paternalism.  Such  action  has  been  taken  by  many  com- 
panies, however,  in  the  belief  that  a  constructive  work 
can  be  accomplished,  especially  in  outlying  mining  camps 
and  other  industrial  districts  in  which  recreational  facili- 
ties are  not  very  accessible  or  do  not  exist.  Experience 
has  shown  that  provisions  for  recreation  succeed  best 
under  the  direction  of  employees,  and  where  the  workers 
themselves  have  taken  the  initiative  in  introducing  them. 
Sometimes  the  expense  of  maintaining  recreational  facili- 
ties is  borne  by  the  employers  or  by  the  employees  inde- 
pendently, but  joint  financial  responsibility  and  control 
have  proved  most  successful.  Provisions  are  made  for: 
!(1)  indoor  recreation,  including  rest  rooms,  recreation 
rooms,  and  club-houses  or  club-rooms;  and  (2)  outdoor 
recreation,  consisting  of  country  clubs,  summer  camps, 
recreation  parks,  athletic  fields,  roof  gardens,  and  outings 
and  picnics  for  employees.  The  nature  of  the  equipment 
and  the  methods  of  administration  of  recreational  systems 
vary  greatly  with  the  locality  and  the  size  of  the  es- 
tablishment. In  communities  where  public  provision  for 


Personnel  Administration  489 

such  activities  is  limited  or  does  not  exist,  such  as  mining 
communities  removed  from  the  larger  centers  of  popula- 
tion, the  industrial  firm  feels  obligated  to  provide  such 
opportunities.  This  is  true,  for  instance,  of  the  mining 
districts  of  Colorado,  where  the  Colorado  Fuel  and  Iron 
Company  has  maintained  for  many  years  very  compre- 
hensive schemes  of  industrial  welfare. 

In  providing  quiet  rooms,  attractively  furnished  and 
equipped  with  literature,  employers  find  the  tendency  to 
temporary  nervous  breakdown  and  exhaustion  is  ma- 
terially decreased.  Recreation  rooms  where  employees 
may  enjoy  themselves  during  the  noon  hour  are  also 
beneficial.  Such  rooms  are  equipped  with  a  victrola  or 
pianola,  books,  magazines,  newspapers,  music  sheets, 
games,  et  cetera.  Special  rooms  are  set  aside  for  those 
who  wish  to  read,  and  for  those  who  prefer  to  play  games 
or  smoke.  Many  compahfes,  as  the  Illinois  Steel  Com- 
pany, have  for  years  provided  club-houses  for  employees, 
in  which  libraries  and  athletic  equipment  are  installed. 
These  are  often  jointly  managed.  In  most  cases  dues  are 
paid  by  members,  the  amount  ranging  from  50  cents  up 
to  $25  a  year,  the  average  fee  being  about  $3.50.  Mem- 
bership is  open  either  to  all  employees  or  to  those  who 
have  affiliated  with  the  benefit  association  of  the  plant. 
The  industrial  branch  of  the  Y.  M.  C.  A.  often  furnishes 
club-house  facilities,  and  sometimes  the  company  es- 
tablishes community  centers.  Dramatics,  social  gather- 
ings, lectures,  musicals,  and  numerous  indoor  activities  are 
carried  on  in  these  institutions.  Country  clubs,  summer 
camps,  recreation  parks,  athletic  fields,  and  outings  have 
made  possible  the  accomplishment  of  very  constructive 
work  among  those  employees  who  wish  for  outdoor  recrea- 
tion at  a  reasonable  cost.  Track  meets,  baseball  games, 
and  other  contests  between  the  various  departments  of 
the  plant  or  between  employees  of  several  establishments 
have  developed  a  desirable  morale  among  the  workers. 
Outdoor  sports  have  not,  however,  been  so  popular  as  the 
indoor  recreation  because  many  workers  are  too  tired  to 
participate  in  them  after  a  day's  work.  The  latter  facili- 


490  Personnel  Administration 

ties,  therefore,  are  considered  more  important  as  a  means 
of  creating  a  spirit  of  loyalty  and  goodwill  and  brighten- 
ing the  lives  of  the  workers. 

Economic  Betterment  Plans. — Recent  years  have  wit- 
nessed an  unprecedented  growth  of  activities  in  industry, 
both  in  Europe  and  in  the  United  States,  which  are  de- 
signed to  improve  the  economic  status  of  the  workers. 
Such  activities  include  disability  funds,  pensions,'  group 
insurance,  and  plans  that  encourage  thrift.  The  mutual 
benefit  association  has  been  widely  introduced  in  Ameri- 
can industries,  although  the  movement  is  comparatively 
younger  here  than  in  other  countries.  The  object  of  such 
an  association  is  "to  foster  a  fraternal  spirit  among  its 
membership,  to  afford  relief  to  its  members  for  disability 
through  sickness  or  accident,  and  to  provide  benefits  in 
case  of  death."  These  associations  are  usually  managed 
jointly  by  employers  and  employees.  The  initiation  fee 
varies,  but  is  ordinarily  one  dollar.  In  addition,  a  physical 
examination  is  required.  Sometimes  membership  is  re- 
quired of  all  employees,  but  generally  it  is  optional.  The 
period  of  membership  required  before  participants  are 
permitted  to  share  in  benefits  varies  greatly;  in  some 
cases  benefits  are  paid  immediately,  in  others  after  a 
period  of  from  five  days  to  six  months.  The  membership 
period  is  usually  longer  for  death  benefits  than  for  sick- 
ness or  accident  benefits.  To  prevent  malingering,  sick- 
ness benefits  are  not  paid  for  the  first  week,  unless  the 
illness  extends  to  three  or  four  weeks  or  longer.  The 
waiting  period  for  accidents  is  less,  because  they  are 
ascertained  immediately.  Disability  benefits  vary  accord- 
ing to  the  length  of  service.  Membership  ceases  when  the 
worker  leaves  the  service  of  the  company. 

Pension  plans  have  been  introduced  in  a  large  number 
of  industrial  establishments,  although  the  development  of 
this  movement  is  comparatively  recent  in  America.  Most 
existing  plans  have  been  established  since  1910.  The 
movement  is  the  result  of  a  growing  conviction  that  such 
schemes  stabilize  the  working  force,  and  that  employees 
who  have  served  the  company  for  a  considerable  length 


Personnel  Administration  491 

of  time  are  justly  entitled  to  a  pension  in  their  declining 
years.  Eligibility  is  based  on  length  of  service,  retirement 
of  the  oldest  employees  taking  place  first.  Usually,  retire- 
ment takes  place  at  60  or  65  years  of  age,  and  the  mini- 
mum amount  of  pension  is  ordinarily  between  $18  and 
$20  a  month,  though  in  some  cases  it  is  as  low  as  $2  or 
$3  a  month.  The  total  amount  of  pension  is  computed 
uniformly  at  a  certain  percentage  of  the  employee's  earn- 
ings for  a  given  number  of  years,  the  percentage  increas- 
ing with  the  number  of  years.  Some  companies  grant 
pensions  purely  on  the  merits  of  particular  cases,  but  this 
is  viewed  by  employees  as  paternalistic.  Although  the 
amount  of  the  pension  is  fairly  liberal,  the  movement  has 
not  been  strikingly  successful  on  account  of  the  fact  that 
there  is  a  marked  element  of  uncertainty.  Pension  agree- 
ments are  in  no  sense  contracts,  so  there  is  nothing  but 
a  moral  obligation  to  pay ;  the  agreement  terminates  with 
separation  from  the  company's  service;  and  freedom  from 
discharge  is  in  no  way  guaranteed  by  the  length  of  service. 
On  account  of  union  activities  or  some  other  action  op- 
posed by  the  employer,  an  employee,  after  years  of  service, 
may  find  himself  deprived  of  a  pension.  Moreover,  there 
is  always  the  danger  of  the  company's  dissolution. 

Where  workers  are  not  earning  enough  to  insure  them- 
selves adequately,  the  group  insurance  scheme  has  been 
introduced  by  many  firms.  Such  a  plan  appeals  to  a  large 
number  of  workers  because  of  the  feeling  of  security 
which  results  therefrom.  Insurance  companies  have  found 
it  possible  to  give  a  blanket  policy  at  reduced  rates  to 
industrial  firms  because:  (1)  The  expense  of  physical  ex- 
amination is  spared  them,  and  (2)  the  risk  is  not  great 
where  favorable  factory  conditions  exist.  Most  com- 
panies pay  all  of  such  insurance,  although  provisions 
vary.  If  the  worker  leaves  the  company's  employ  he  is 
often  given  an  opportunity  to  continue  his  insurance  at 
the  regular  rate  specified  by  the  insurance  company.  In- 
surance benefits  vary,  but  it  is  desirable  that  they  be  the 
equivalent  of  one  year's  salary  or  wages  up  to  a  certain 
maximum,  and  be  paid  in  installments. 


492  Personnel  Administration 

Other  economic  betterment  schemes  are  those  devised 
to  encourage  thrift  and  economy  among  the  employees. 
They  include  savings  and  loan  plans,  stock  subscription 
on  favorable  terms,  building  funds,  cooperative  buying, 
discounts  on  purchases,  legal  aid  and  advice  with  regard 
to  investments  or  expenditures,  and  profit-sharing.  Con- 
siderable variety  exists  in  these  plans,  but  their  general 
principles  are  similar.  Christmas  or  vacation  funds  are 
started  with  trust  companies,  which  draw,  in  addition  to 
the  bank's  3  per  cent,  an  additional  3  per  cent  interest 
given  by  the  company.  Sometimes  the  company  deposits 
an  amount  equivalent  to  a  part  or  the  whole  of  the  de- 
posits of  the  employee.  A  certain  period  of  service  is 
often  a  condition  of  participation.  Provisions  for  with- 
drawal vary.  When  the  employee  leaves  the  firm 's  service 
he  is  usually  paid  what  he  deposits,  while  in  the  case  of 
death  the  total  amount  is  given  his  legal  representatives. 
Building  funds  are  designed  either  to  aid  employees  in 
the  construction  or  purchase  of  homes,  or  to  tide  them 
over  financial  stringency  occasioned  by  illness  or  some 
other  exigency.  They  are  provided  to  rescue  the  workers 
from  loan  sharks  who  charge  exorbitant  interest  rates. 
The  home-building  plan  of  the  Midvale  Steel  and  Ordnance 
Company  and  subsidiary  companies  is  typical.  The  em- 
ployee is  required  to  provide  in  cash,  government  securi- 
ties, or  its  equivalent  in  real  estate,  at  least  10  per  cent 
of  the  total  value  of  the  property  when  completed.  Se- 
curities purchased  through  the  company  are  accepted  at 
par,  otherwise  at  the  current  market  rate.  The  remaining 
90  per  cent  is  loaned  by  the  company,  no  loan  being  in 
excess  of  $8,000.  The  loan  is  repayable  in  monthly  install- 
ments, and  is  deducted  from  wages.  Interest  of  5  per 
cent  per  annum  is  charged  upon  deferred  payments. 

Cooperative  buying  was  generally  introduced  following 
the  rise  of  prices  which  began  in  the  late  summer  of 
1915.  Goods  are  sold  to  employees  at  cost  plus  overhead 
charges,  or  at  greatly  reduced  prices.  Considerable  dis- 
counts are  given  on  the  purchases  made  by  employees  in 
department  stores  in  the  United  States.  As  an  encourage- 


Personnel  Administration  493 

ment  to  thrift,  employers  provide  for  gratis  distribution 
of  stock,  or  for  stock  subscription  at  favorable  rates  on 
the  easy-payment  plan.  Stock  subscription  is  becoming 
quite  popular  among  American  concerns  and  has  been 
highly  successful  as  a  means  of  promoting  loyalty  and 
cooperation,  as  well  as  encouraging  the  habit  of  saving. 
Legal  aid  to  employees  desiring  to  make  investments,  or 
who  are  in  some  difficulty,  has  proved  very  beneficial  to 
workers,  and  has  stimulated  the  feeling  that  the  company 
is  vitally  interested  in  the  welfare  and  protection  of  its 
working  force.  Employers  are  loud  in  their  praise  of 
these  various  economic  betterment  activities,  claiming  that 
they  develop  a  spirit  of  cooperation,  steadiness,  thrift,  and 
responsibility. 

Other  Welfare  Service. — The  extension  of  betterment 
activities  to  include  the  families  of  employees  is  another 
phase  of  the  welfare  work  of  some  companies.  Moreover, 
it  is  an  extremely  delicate  phase,  since  workers  resent 
any  semblance  of  charity  or  philanthropy  and  seeming 
interference  with  personal  affairs.  Consequently,  this 
work  is  usually  delegated  to  a  third  agency,  such  as  the 
local  Y.  W.  C.  A.  or  Y.  M.  C.  A.,  a  visiting  nurse,  a  com- 
munity center,  settlement  house,  or  welfare  worker,  ap- 
parently working  independently  but  actually  in  the  com- 
pany's service.  Notable  work  along  this  line  has  been 
done  by  steel  companies,  mining  companies,  southern  cot- 
ton mills,  and  other  concerns  which  employ  thousands  of 
workers  and  often  face  the  necessity  of  providing  homes, 
parks,  playgrounds,  churches,  theaters,  schools,  libraries, 
and  general  supervision  of  living  conditions.  This  work 
is  accepted  as  an  obligation  growing  out  of  industrial 
operations.  Where  company  homes  are  rented,  strict 
supervision  is  maintained  so  that  bath  tubs  shall  not  be 
used  for  coal  bins,  fences  for  firewood,  and  rooms  over- 
crowded with  lodgers.  Other  problems  arise  in  the  col- 
lection and  disposal  of  garbage,  bacteriological  analysis 
of  drinking  water,  and  the  provision  of  a  supply  of  pure 
milk.  A  visiting  nurse  or  welfare  worker  visits  the  homes 
of  the  employees,  caring  for  the  sick,  giving  instruction 


494  Personnel  Administration 

in  the  care  of  children,  and  advising  housewives  on  family 
budgets,  food  preparation,  and  dress  making.  These  ac- 
tivities have  yielded  notable  benefits  in  backward  com- 
munities. 

Administration. — The  administration  of  personnel  rela- 
tions varies  greatly  with  the  different  establishments  that 
have  taken  definite  steps  in  this  direction.  The  type  of 
organization  provided  to  handle  personnel  problems  will 
necessarily  have  to  be  sufficently  elastic  to  meet  the 
peculiar  problems  of  each  plant.  Moreover,  experience 
shows  that  the  structure  and  functions  of  such  an  organ- 
ization can  best  be  determined  after  there  has  been  a 
scientific  analysis  of  labor  relations  within  the  establish- 
ment, and  a  definite  personnel  policy  has  been  formulated. 
It  is  fundamentally  important  that  the  machinery  of  per- 
sonnel administration  be  centralized.  The  great  need  is 
for  a  definite  agency  in  industry  that  will  analyze  im- 
partially and  administer  sympathetically  the  relations  of 
employer  and  employees.  The  rights,  responsibilities,  and 
duties  of  all  parties  to  the  labor  contract  must  be  clearly 
set  forth  and  appreciated,  if  industrial  peace  and  good- 
will are  to  be  guaranteed.  Where  the  establishment  is 
small,  there  is  hardly  need  for  a  separate  personnel  de- 
partment, the  functions  of  such  a  department  being  exer- 
cised by  the  manager  or  superintendent.  Even  in  larger 
enterprises  it  has  been  found  wise  for  the  vice-president 
or  some  other  major  executive  to  supervise  personnel 
work,  but  in  exceedingly  large  establishments  a  separate 
department  becomes  necessary. 

A  welfare  department  is  usually  established  first  to 
assume  charge  of  betterment  activities,  but  this  develops 
into  a  larger  organization  known  as  the  employment  de- 
partment, having  control  over  labor  supply,  recruiting, 
selecting,  placing,  transferring,  promoting  of  employees, 
et  cetera.  The  welfare  department  becomes  a  division 
of  this  larger  organization  and  supervises  mutual  aid,  sick 
benefits,  loans,  home  visiting,  social,  and  other  activities. 
Gradually  there  evolves  a  more  specialized  and  centralized 
organization  known  as  the  personnel  department,  the  sub- 


Personnel  Administration  495 

divisions  of  which,  together  with  their  particular  func- 
tions, have  already  been  indicated. 

It  is  generally  agreed  that  four  conditions  are  necessary 
for  successful  personnel  administration;  namely,  (1)  a 
definite  personnel  department  with  major  administrative 
powers,  placed  on  a  parity  with  other  departments  of  the 
plant;  (2)  a  capable  personnel  manager  or  director,  pos- 
sessing a  strong  and  pleasing  personality;  general  indus- 
trial, executive,  and  shop  experience ;  and  familiarity  with 
organized  social  and  industrial  movements ;  (3)  coordina- 
tion of  the  work  of  the  personnel  department  with  the 
activities  of  other  departments  such  as  production,  finance, 
and  sales  departments ;  and  (4)  the  introduction,  wherever 
possible,  of  joint  administration  by  representatives  of 
management  and  employees. 

Personnel  administration  was  given  intelligent  sanction 
in  1918,  when  the  National  Association  of  Employment 
Managers  was  organized  at  Rochester,  New  York,  by  men 
engaged  in  personnel  work  in  various  industrial  establish- 
ments. In  1920  the  functions  of  personnel  directors  had 
become  so  broad  that  the  name  of  this  organization  was 
changed  to  the  Industrial  Relations  Association  of 
America.  Its  purpose  was  to  assist  members  in  selecting, 
placing,  training,  and  stabilizing  employees  through  in- 
formation concerning  the  best  experience,  theory,  and 
literature  in  employment  and  personnel  lines.  This  was 
done  through  meetings,  addresses,  papers,  committee 
studies  and  reports,  general  discussion,  and  an  annual 
convention.  Local  councils  were  organized  which  met 
monthly  in  such  important  industrial  centers  as  Chicago, 
New  York,  Philadelphia,  Boston,  Pittsburgh,  and  Cleve- 
land. Any  industry  might  join  and  send  a  representative 
to  these  meetings.  The  official  organ  was  Personnel.  In 
December,  1921,  the  association  had  a  membership  of  more 
than  2,300  firms,  representing  in  normal  times  about  two 
and  one-half  million  workers.  Recently  this  association  has 
joined  forces  with  the  National  Association  of  Corporation 
Schools  to  form  the  National  Personnel  Association. 

Accurate  figures  concerning  the  cost  of  personnel  ad- 


496  Personnel  Administration 

ministration  are  not  available,  but  some  experiences  in- 
dicate that  the  expense  of  welfare  work  varies  from  one 
to  five  per  cent  of  the  total  annual  pay-roll.  It  can  be 
stated  with  a  fair  degree  of  accuracy  that  a  reasonably 
adequate  group  of  activities  can  be  maintained  for  two 
per  cent  of  the  total  annual  pay-roll.  Success  is  not 
always  proportionate  to  the  financial  outlay.  Other  fac- 
tors enter  in,  such  as  a  sympathetic  attitude  on  the  part 
of  the  company,  a  square  deal  in  collective  bargaining, 
employee  participation  in  financial  responsibility,  and 
joint  control. 

Conclusions. — Wide  experience  with  personnel  adminis- 
tration and  various  improvement  plans  in  industry  in  the 
United  States  and  Great  Britain  indicate  that  thrift  has 
been  promoted  among  employees;  efficiency  increased; 
labor  turnover  greatly  reduced;  living  conditions  im- 
proved ;  production  costs  diminished ;  wastes  in  materials, 
time,  and  labor  reduced  to  a  minimum ;  incentives  to  out- 
put and  promotion  applied  successfully;  and  contentment, 
goodwill,  loyalty,  and  a  sense  of  partnership  among  the 
workers  encouraged.  Industrial  unrest  and  friction  have 
not  disappeared  from  the  plants  where  these  schemes  have 
been  inaugurated,  and  in  many  cases  the  workers  have 
resented  these  evidences  of  paternalism,  but  such  plans 
have  unquestionably  conduced  to  greater  harmony  be- 
tween employers  and  employees.  Industrial  workers, 
however,  will  continue  to  find  more  permanent  safeguards 
for  their  interests  in  independent  and  effective  collective 
bargaining  through  their  own  organizations  than  in  plans 
that  are  initiated  and  terminated  arbitrarily  at  the  will 
of  the  employer.  Such  schemes  will  probably  become  a 
permanent  phase  of  industrial  management,  and  will  suc- 
ceed if  the  provision  is  made  for  true  democratic  control 
by  management  and  workers, 


Personnel  Administration  497 


SELECTED  REFERENCES 

AMERICAN  ACADEMY  OF  POLITICAL  AND  SOCIAL  SCIENCE,  PHILA- 
DELPHIA, Annals,  Vols.  LXV,  May,  1916;  LXXXI,  January 
and  March,  1919. 

CARLTON,  F.  T.,  The  History  and  Problems  of  Organized  Labor, 
revised  edition,  1920,  Chaps.  IX  and  XVIII. 

COMMONS,  J.  R.,  Industrial  Goodwill,  1919. 

COMMONS,  J.  R.  (editor),  Trade  Unionism  and  Labor  Problems 
revised  edition,  1921,  Chaps.  XI-XIV. 

COMMONS,  J.  R.,  Organized  Labor's  Attitude  Toward  Industrial 
Efficiency,  Amer.  Econ.  Rev.,  1:463-472,  1911. 

FRANKEL,  L.  K.,  AND  FLEISCHER,  ALEXANDER,  The  Human  Factor 
in  Industry,  1920. 

GANTT,  H.  L.,  Work,  Wages,  and  Profits,  1910. 

GILBRETH,  LILLIAN  M.,  Psychology  of  Management,  1914. 

HOXIE,  R.  F.,  Scientific  Management  and  Labor,  1915. 

HOXIE,  R.  F.,  Trade  Unionism  in  the  United  States,  1917,  Chaps. 
XII  and  XIII. 

LINK,  H.  C.,  Employment  Psychology,  1920. 

MAROT,  HELEN,  Creative  Impulse  in  Industry,  1918. 

SIMONS,  A.  M.,  Personnel  Relations  in  Industry,  1921. 

TAYLOR,  F.  W.,  The  Principles  of  Scientific  Management,  1911. 

TEAD,  ORDWAY,  Instincts  in  Industry,  1918. 

TEAD,  ORDWAY,  AND  METCALF,  H.  C.,  Personnel  Administration, 
1920. 

UNITED  STATES  BUREAU  OF  LABOR  STATISTICS,  Bulletin  250,  1919. 

UNITED  STATES  COMMISSION  ON  INDUSTRIAL  RELATIONS,  Final 
Report,  1916,  pp.  127-143,  255-261. 

UNITED  STATES  PUBLIC  HEALTH  SERVICE,  Bulletin  99,  1919. 


CHAPTER  XXI 

PROFIT-SHAKING  AND  LABOR  COPARTNERSHIP 

Methods  of  Industrial  Remuneration. — Chief  among  the 
causes  of  industrial  unrest,  it  will  be  remembered,  is  the 
relatively  low  income  of  working  classes.  The  numerous 
methods  of  industrial  remuneration,  many  of  which  have 
been  devised  to  eliminate  the  industrial  conflict,  utilize 
labor  economically,  and  establish  justice,  are  the  time 
wage,  piece  wage,  task  wage,  sliding  scale,  progressive 
wage,  bonus,  profit-sharing,  gain-sharing,  and  labor  co- 
partnership. The  method  most  generally  applied  is  the 
time  wage,  under  which  payment  is  made  by  the  hour, 
day,  or  week.  Employers  object  to  the  time  basis  because 
of  the  difficulty  of  quickening  the  pace  of  the  workers. 
It  is  claimed  that  the  efficient  worker  adjusts  his  pace 
to  the  inefficient,  since  no  cognizance  is  taken  in  differ- 
ences of  ability  and  productivity.  This  method  is  most 
desirable  where  operations  cannot  be  standardized  suffi- 
ciently to  ascertain  the  relative  productivity  of  each  work- 
man. Organized  labor  favors  the  time  wage  because  it 
prevents  pace-making.  Under  the  piece-wage  system  the 
basis  of  compensation  is  the  unit  of  output.  Piece-work 
may  be  individual  or  group.  Under  the  former,  employees 
work  independently,  while  under  the  latter  the  employer 
pays  a  group  of  workers  a  certain  sum  for  a  given  quan- 
tity of  work,  the  wage  being  distributed  among  the  work- 
ers as  they  see  fit.  Employers  are  inclined  to  favor  the 
piece-rate  system  because  it  stimulates  production,  but 
such  a  method  tends  to  sacrifice  quality  to  quantity,  es- 
pecially where  close  supervision  is  not  possible.  Workers 
object  to  the  method  because  it  tends  to  speeding  up  and 
results  in  reduction  of  the  rate  per  piece. 

The  remaining  methods  are  really  modifications  of  the 
two  just  described.  The  task  wage  requires  that  the 

498 


Profit-Sharing  and  Labor  Copartnership     499 

worker  complete  a  certain  amount  of  output  within  a 
stated  time,  or  suffer  reduction  in  wages.  On  the  other 
hand,  if  more  than  the  required  amount  of  output  is  real- 
ized, the  workman  receives  no  extra  compensation.  The 
task  wage  may  be  individual  or  collective.  Overexertion 
and  fatigue  have  resulted  from  this  system.  The  progres- 
sive wage,  known  also  as  the  premium  plan,  is  a  method 
under  which  employees  receive,  in  addition  to  their  regular 
time  or  piece  wage,  a  premium  or  bonus  calculated  either 
on  the  basis  of  output  above  a  certain  minimum  or  accord- 
ing to  economies  in  the  use  of  materials.  The  premium 
may  be  simple  or  progressive,  that  is,  it  may  be  a  fixed 
sum  above  a  defined  standard  of  output,  or  it  may  vary 
according  to  the  ability  of  the  workman.  This  system 
has  been  opposed  by  the  workers  on  account  of  its 
tendency  to  introduce  inequality,  to  result  in  overwork, 
tnd  to  increase  unemployment.  It  is  often  referred  to 
as  gain-sharing,  of  which  there  are  numerous  variations.1 

The  sliding  scale  is  a  system  under  which  wages  are 
made  to  vary  with  the  price  of  the  product.  It  is  applied 
often  in  industries  where  there  are  frequent  changes  in 
the  price  of  the  product,  such  as  coal  and  metal  mining. 
In  periods  of  prosperity  wages  rise  automatically  with 
prices,  while  in  periods  of  depression  the  wage  level  drops. 
Several  objections  have  been  raised  against  this  plan: 
(1)  It  has  been  difficult  to  determine  standards,  that  is, 
the  price  to  be  considered  normal  and  the  proper  wage 
adjustment;  (2)  many  controversies  arise  over  the  deter- 
mination of  the  percentage  of  increase  or  decrease  of 
wages  that  should  accompany  the  rise  or  fall  in  prices; 
(3)  unless  a  minimum  wage  is  established,  the  income 
of  the  workers  in  periods  of  depression  may  be  reduced 
to  a  point  that  menaces  their  health  and  progress.  In  the 
British  coal-mining  industry  the  minimum  wage  has  been 
used  to  prevent  this  deterioration. 

There  are  various  bonus  schemes  under  which,  in  a  pros- 
perous year,  a  certain  lump  sum  is  set  aside  for  distribution 
among  employees.  The  quantity  bonus  is  based  on  the 

1  See  Schloss,  Method*  of  Industrial  Remuneration,  Chap.  VII. 


500     Profit-Sharing  and  Labor  Copartnership 

amount  of  output  above  a  certain  standard,  the  quality 
bonus  on  the  character  of  the  work  performed,  and  the 
attendance  bonus  on  regularity  of  work,  length  of  service, 
or  cooperation  and  goodwill.  Product-sharing,  often  found 
in  fishing  and  agricultural  pursuits,  is  a  plan  under  which 
the  product  is  share  in  accordance  with  a  predetermined 
agreement. 

The  Nature  of  Profit-Sharing. — Profit-sharing  is  a 
method  of  industrial  remuneration  under  which  an  em- 
ployer voluntarily  agrees  to  give  his  employees  a  definite 
share  in  the  net  profits  of  the  enterprise,  in  addition  to 
their  regular  wage.  According  to  resolutions  passed  by 
the  International  Congress  on  Profit-Sharing  in  Paris,  in 
1889,  and  subsequent  conferences,  genuine  profit-sharing 
has  three  fundamental  elements:  (1)  The  amounts  to  be 
distributed  among  participants  depend  principally  on 
earnings;  (2)  the  proportion  of  the  earnings  to  be  dis- 
tributed is  definitely  determined  in  advance;  and  (3)  the 
benefits  of  the  plan  are  to  extend  to  at  least  one-third 
of  the  ordinary  wage-earning  or  salary-earning  employees. 

The  Purposes  of  Profit-Sharing. — In  introducing  profit- 
sharing  schemes  employers  have  one  or  several  purposes 
in  mind :  the  promotion  of  industrial  efficiency ;  the  reduc- 
tion of  labor  turnover ;  elimination  of  disputes  and  strikes ; 
encouragement  of  thrift;  economy  in  time  and  materials; 
effective  management  and  supervision;  realization  of 
social  justice;  valuable  advertising;  development  of  a 
sense  of  loyalty ;  and  destruction  of  unionism. 

Forms  and  Methods. — The  forms  and  methods  of  profit- 
sharing  include:  (1)  cash  payments  which  are  made  at 
the  end  of  a  specified  period;  (2)  deferred  sharing,  in 
which  the  profits  to  be  divided  are  placed  in  a  savings 
account,  provident  fund,  annuity,  or  pension  fund;  and 
(3)  payment  in  shares  of  stock.2  Cash  bonus  schemes 
are  preponderant  in  the  United  States  and  the  United 
Kingdom,  although  deferred  participation  and  stock  dis- 
tribution are  gaining  favor  in  these  countries.  Deferred 
sharing  is  most  prevalent  in  France. 

*  Adams  and  Sumner,  Labor  Problems,  p.  335. 


Profit-Sharing  and  Labor  Copartnership    501 

1.  Cash  Bonus. — Cash  payments  have  constituted  the 
most  successful  method  of  sharing  profits,  but  their  dis- 
advantage lies  in  the  fact  that  the  employer  has  no  as- 
surance of  the  wise  use  of  the  supplementary  income. 
Workers  prefer  this  method  because  the  bonus  is  declared 
at  frequent  intervals.     Cash  bonus  schemes  have  com- 
prised about  two-thirds  of  the  plans  introduced  in  Great 
Britain  and  a  large  percentage  of  those  in  the  United 
States,  although  in  the  latter  country  they  have  been 
less  satisfactory  than  stock  distribution. 

2.  Deferred  Sharing. — In  some  establishments  the  bonus 
is  placed  in  an  account  for  the  employee,  from  which  he 
may  draw  sums  at  any  time  on  short  notice.    More  often, 
however,  the  amount  is  placed  to  the  worker's  credit  in 
a  provident  or  superannuation  fund,  in  which  case  it  is 
not   ordinarily  withdrawable  while   he   remains  in   the 
service  of  the  firm,  or  it  is  retained  partly  or  wholly  for 
investment  in  the  capital  of  the  enterprise,  and  bears 
interest  varying  from  3  per  cent  to  6  per  cent.     These 
accumulations  are  returnable  to  the  employee  upon  reach- 
ing a  certain  age,  or  after  a  stated  period  of  service,  or 
in  the  case  of  serious  emergency.    Usually  workers  who 
leave  the  employ  of  the  company,  go  out  on  strike,  or 
are  dishonorably  discharged  do  not  participate  in  the 
benefits,  although  in  some  pians  deserving  employees  who 
leave  on  account  of  health  or  other  good  reasons  receive 
a  part  of  the  savings.    This  method  has  not  been  generally 
successful,  especially  in  the  United  States.     Because  of 
the  more  or  less  indefinite  postponement  of  participation, 
these  schemes  have  not  provided  an  incentive  to  goodwill 
and  efficiency;  the  workers  do  not  seem  to  care  for  the 
extended  waiting  period. 

3.  Stock    Distribution. — In   some   instances   shares   are 
issued  to  employees  without  payment,  in  recognition  of 
superior  service  for  a  term  of  two  to  five  years.    A  large 
number  .of  plans  provide  for  the  issue  of  stock  to  em- 
ployees at  a  price  below  the  market  rate,  payments  to 
be  made  in  installments.    Under  some  English  schemes  em- 
ployees holding  shares  are  given  a  cumulative  preferred 


502    Profit-Sharing  and  Labor  Copartnership 

dividend,  and  in  others  the  workers  receive  dividends 
without  holding  regular  shares,  certificates  being  given 
them  which  are  not  marketable  as  the  shares  held  by  the 
ordinary  investors.  Where  shares  are  issued  to  employees 
free  or  on  favorable  terms,  there  is  ordinarily  a  maximum 
limit  to  the  number  set  aside  for  this  purpose.  In  Eng- 
land this  maximum  ranges  from  $250  to  $5,000  for  each 
person.  In  the  United  States  the  number  of  shares  al- 
lowed each  worker  varies  greatly  with  the  different  plans, 
but  earning  capacity  is  the  usual  basis.  The  transfer  of 
such  shares,  except  to  fellow  employees,  is  usually  pro- 
hibited, but  the  company  repurchases  them  in  the  event 
of  the  owner's  death  or  separation  from  service.  Shares 
purchased  by  employees  on  special  terms  do  not  always 
carry  voting  rights. 

Experience  in  Great  Britain  and  the  United  States  in- 
dicates that  only  a  small  number  of  the  workers  avail 
themselves  of  the  opportunity  to  purchase  stock,  in  the 
former  the  percentage  ranging  from  2  to  6  per  cent,  and 
in  the  latter,  about  40  per  cent  of  the  eligible  employees. 
Cash  bonuses,  on  the  other  hand,  reach  an  average  of 
75  per  cent  of  the  employees  of  the  companies  having  such 
plans.  In  both  countries  representation  on  boards  of 
directors  is  granted  when  employees  hold  considerable 
stock.  Stock  distribution  to  employees  has  been  criticized 
on  the  grounds  that:  (1)  It  is  extremely  difficult  to  pre- 
vent overcapitalization,  since  the  company  is  tempted  to 
issue  excessive  amounts  of  stock  in  order  to  enlist  the 
cooperation  and  goodwill  of  employees;  (2)  it  is  not  easy 
to  insure  the  retention  of  stock  by  the  worker,  and  extra 
premiums  have  to  be  paid  or  penalties  inflicted  to  gain 
this  end;  and  (3)  only  a  comparatively  small  proportion  of 
employees  take  advantage  of  such  schemes.  The  chief 
value  of  stock-ownership  plans  lies  in  the  stimulation  of 
careful  workmanship  and  loyalty. 

Determination  of  the  Bonus. — The  amount  distributed 
among  employees  consists  of  a  certain  percentage  of  the 
net  profits  for  the  preceding  year,  although  in  some  cases 
the  apportionment  is  made  quarterly  or  semiannually/ 


Profit-Sharing  and  Labor  Copartnership    503 

Ordinarily,  the  amount  apportioned  to  each  employee  is 
in  proportion  to  his  annual  earnings,  overtime  and  piece- 
work being  excluded.  Allowance  is  sometimes  made  for 
time  lost  through  illness,  and  a  reduced  bonus  is  paid 
employees  with  a  service  record  below  a  certain  standard 
and  under  a  certain  age.  In  England  the  distribution 
has  ranged  from  5  to  50  per  cent  of  net  profits,  while 
in  the  United  States  the  amount  has  averaged  about  12 
per  cent  of  annual  wages.  To  produce  the  best  results, 
at  least  6  per  cent  additional  income  has '  been  found 
necessary. 

Conditions  of  Participation. — The  most  general  qualifi- 
cation for  participation  in  profit-sharing  plans  is  a  speci- 
fied period  of  service,  varying  from  four  weeks  to  five 
years,  but  usually  six  months  or  a  year  is  the  time  re- 
quired. Occasionally,  employees  who  have  been  with  the 
company  less  than  the  minimum  period  of  service  receive 
one-half  of  the  regular  bonus.  Many  plans  exclude  cer- 
tain classes  of  employees,  such  as  those  below  a  specified 
age,  those  working  wholly  or  partly  on  commission,  and 
those  earning  more  than  a  specified  wage  or  salary  for 
the  period.  Sometimes  members  of  trade  unions  are  de- 
nied participation,  although  in  many  cases  membership 
in  a  labor  organization  is  no  barrier,  and  in  some  English 
schemes  trade  union  membership  is  compulsory.  The  pro- 
vision is  often  made  that  employees  shall  lose  their  right 
to  a  share  in  profits  if  found  guilty  of  unsatisfactory 
conduct,  waste  of  materials,  negligence  of  machinery  and 
equipment,  irregularity  in  employment  or  absence  with- 
out sufficient  cause,  inefficiency,  or  breach  of  discipline. 

Historical  Sketch. — 1.  France. — Profit-sharing  had  its 
beginning  in  France  with  the  experiment  started  by  the 
house  painter  Edme-Jean  Leclaire,  in  1842.  In  1843  profit- 
sharing  was  introduced  in  the  paper  factory  of  Laroche- 
Joubert,  Lacroix  et  Cie.  In  1844  the  Paris  and  Orleans 
Railway  Company  adopted  a  profit-sharing  scheme.  For 
twenty  years  following  these  initial  experiments  progress 
was  slow,  but  between  1870  and  1880  at  least  twenty-seven 
firms  adopted  plans  that  proved  successful.  The  move- 


504    Profit-Sharing  and  Labor  Copartnership 

ment  received  considerable  impetus  in  the  decade  of  the 
nineties;  forty-one  establishments  introduced  plans.  In 
1902  only  ninety-three  firms  out  of  slightly  more  than 
one  hundred  known  to  have  made  experiments  were  ac- 
tually practicing  profit-sharing.  In  1914,  about  120  com- 
panies were  sharing  profits  with  their  employees  and  500 
cooperative  societies  were  paying  bonuses  varying  from 
10  to  60  per  cent  of  the  annual  wage.  The  progress  since 
that  time  has  been  encouraging.  The  movement  in  France 
has  been  sponsored  largely  by  the  Societe  pour  L' Etude 
Pratique  de  la  Participation  du  Personnel  dans  les  Bene- 
fices, established  in  1879,  and  recognized  by  the  French 
government  as  a  public  utility. 

2.  United  Kingdom. — Although  profit-sharing  was  intro- 
duced by  Lord  Wallscourt  in  1829,  on  his  Irish  estate, 
the  first  notable  experiment  was  made  by  H.  Briggs  and 
Company  in  their  Whitwood  coal  mines  in  Yorkshire,  in 
1865.    The  failure  of  the  Briggs  plan  in  1875  had  a  dis- 
astrous effect  upon  the  profit-sharing  movement  in  the 
United  Kingdom.    A  revival  took  place  in  1889-1891,  when 
no  less  than  50  firms  adopted  profit-sharing  plans,  the 
most  prominent  of  which  was  the  South  Metropolitan  Gas 
Company,  of  London.     In  1894  it  was  ascertained  that 
of  152  plans  originated  in  this  period  only  101  were  still 
in  operation.    In  only  16  of  the  abandoned  experiments 
was  failure  attributed  to  dissatisfaction  with  the  funda- 
mental principles  of  profit-sharing.     Of  the  total  number 
(380)  of  plans  that  were  put  into  operation  up  to  1920, 
about  52  per  cent  have  ceased  to  exist.    Only  14  plans 
that  were  in  existence  in  1919  had  been  in  operation  more 
than  30  years,  and  only  36  originated  prior  to  1901.    The 
average  duration  of  abandoned  schemes  was  about  eight  and 
one-half  years.    Periods  of  activity  in  establishing  profit- 
sharing  schemes  have  coincided  with  periods  of  prosperity 
and  industrial  unrest.   The  British  cooperative  movement  has 
made  very  little  use  of  profit-sharing. 

3.  United  States. — Profit-sharing  in  the  United  States 
began  about  1870.    The  pioneer  experiments,  such  as  that 
introduced  by  Brewster  and  Company,  carriage  builders 


Profit-Sharing  and  Labor  Copartnership    505 

of  New  York,  in  1870,  were  short  lived.  With  the  organ- 
ization of  the  Association  for  the  Promotion  of  Profit- 
Sharing  in  1892,  the  movement  was  revived.  In  1896, 
however,  only  12  of  the  50  schemes  that  had  been  applied 
were  in  actual  operation.  By  1899  a  few  additional  firms 
had  adopted  plans,  and  in  1902  fourteen  establishments 
were  known  to  be  practicing  profit-sharing.  No  general 
investigation  was  made  again  until  1916,  when  the  United 
States  Department  of  Labor  made  a  survey  which  showed 
that  60  companies  were  operating  plans.  Of  these,  two- 
thirds  had  been  in  existence  less  than  a  decade.  In  1920, 
the  National  Industrial  Conference  Board  listed  137  con- 
cerns that  were  practicing  profit-sharing  in  some  form, 
but  only  41  of  these  schemes  were  characterized  as  true 
profit-sharing.  A  survey  made  by  the  National  Civic 
Federation  in  the  same  year  indicates  that  the  number 
of  establishments  sharing  profits  with  their  employees  is 
greater  to-day  than  at  any  other  time  in  the  history  of 
the  movement. 

Types  of  Establishments  in  Which  Profit-Sharing  Is  Ap- 
plied.— Profit-sharing  has  been  introduced  in  almost  every 
kind  of  trade,  and  no  general  conclusions  can  be  drawn 
as  to  the  type  of  business  or  industry  most  suited  to  the 
application  of  the  principle.  Success  is  most  likely  to  be 
assured  in  businesses  that  can  take  quick  inventory  and 
determine  net  profits  about  every  three  months.  A  recent 
investigation  in  the  United  States  shows  that  in  40  es- 
tablishments studied  the  smallest  company  reported  40 
workers,  and  the  largest  20,000  workers.  It  appears  that 
about  two-thirds  of  the  profit-sharing  establishments  em- 
ploy less  than  300  people  while  probably  not  more  than 
13  per  cent  have  1,000  or  more  employees.  Only  20  per 
cent  of  the  firms  in  Great  Britain  that  were  sharing  profits 
with  employees  in  1919  employed  more  than  1,000  work- 
ers, although  there  were  5  that  had  over  10,000,  and  one 
had  nearly  70,000  employees.  The  greatest  success  seems 
to  have  been  in  the  smaller  enterprises. 

Labor  Copartnership. — Professor  Oide  has  observed 
that  an  even  more  radical  modification  of  the  wage  con- 


506    Profit-Sharing  and  Labor  Copartnership 

rTract  than  is  attempted  by  profit-sharing  would  be  to 
/  transform  it  into  a  veritable  partnership,  giving  to  the 
/  worker  a  share,  not  only  in  profits  but  in  administration, 
/  responsibility,  and  losses.3  This  is  the  aim  of  labor  co- 
( partnership,  which  claims  for  all  the  workers  participa- 
tion to  some  extent  in  the  profits,  capital,  and  control 
of  the  industry  or  business  in  which  they  are  employed. 
The  Labor  Copartnership  Association  of  Great  Britain, 
which,  more  than  any  other  agency,  is  responsible  for 
the  promotion  of  profit-sharing  and  copartnership  in  that 
country,  outlines  the  copartnership  plan  as  follows:  (1) 
The  worker  shall  receive,  in  addition  to  the  standard 
wages  of  the  trade,  some  share  in  the  final  profit  of  the 
business  or  the  economy  of  production;  (2)  the  worker 
shall  accumulate  his  share  of  profit,  or  at  least  a  part 
of  it,  in  the  capital  of  the  enterprise;  (3)  the  worker 
shall  acquire  some  share  in  the  control  of  the  business 
in  two  ways,  including  (a)  the  assumption  of  the  ordinary 
rights  and  responsibilities  of  a  shareholder  through  the 
ownership  of  stock,  and  (&)  the  formation  of  a  copartner- 
ship committee  of  workers  which  has  a  voice  in  the  manage- 
ment of  the  business.4  The  copartnership  committee  ad- 
ministers profit-sharing  or  copartnership  funds,  determines 
wages,  hours,  and  conditions  of  labor,  and  adjusts  griev- 
ances and  disputes.  On  June  30,  1921,  there  were  205 
firms  in  Great  Britain  with  an  aggregate  of  over  300,000 
employees,  which  were  practicing  systems  of  profit-sharing 
or  labor  copartnership. 

Examples  of  Successful  Profit-Sharing  and  Copartner- 
ship.— France. — 1.  The  Maison  Leclaire. — In  1838,  Edme- 
Jean  Leclaire,  a  house  painter  and  decorator  in  Paris,  per- 
suaded his  permanent  employees  to  establish  a  mutual  bene- 
fit society  to  care  for  cases  of  sickness;  this  group  he 
considered  a  kernel  (Noyau)  of  efficient  workmen.  In  1842 
he  announced  a  comprehensive  plan.  Originally,  simple 

•  Political  Economy,  p.  646. 

•Labor  Copartnership  Association,  Memorandum  on  Labor  Copart- 
nership, issued  November,  1919, 


Profit-Sharing  and  Labor  Copartnership     507 

cash  dividends  only  were  paid  to  his  permanent  employees, 
but  in  1863  the  Mutual  Aid  Society  was  admitted  as  a 
perpetual  "sleeping  partner,"  and  in  1869  the  entire  busi- 
ness was  incorporated,  with  the  stipulation  that  profits 
should  be  divided  henceforth  among  the  managing  partners, 
the  Mutual  Provident  Society,  and  the  regular  force  of 
employees.  The  plan  has  undergone  many  modifications, 
but  the  essentials  have  remained  unchanged.  There  are 
two  partners  in  the  business  who  have  unlimited  liability, 
while  the  Mutual  Provident  Society,  as  the  third  partner, 
has  limited  liability.  Five  per  cent  of  earnings  is  paid 
on  the  capital  of  the  partners,  capital  receiving  no  share 
of  profit  beyond  this  fixed  interest.  The  net  profits  of  the 
business  are  apportioned  as  follows:  (1)  15  per  cent  to  the 
managing  partners,  in  addition  to  their  annual  salaries, 
(2)  35  per  cent  to  the  Mutual  Provident  Society,  and  (3) 
50  per  cent  to  the  employees,  according  to  their  wages  and 
salaries.  Leclaire  usually  paid  about  a  12  per  cent 
dividend  to  labor,  but  in  one  year  24  per  cent  was  paid. 
In  1912  the  dividend  was  approximately  20  per  cent  and 
it  has  been  around  that  figure  in  recent  years.  From  the 
commencement  of  the  scheme  to  1918,  the  workers  had 
received  approximately  $1,750,000,  and  the  Mutual  Provi- 
dent Society  about  $1,055,000.  A  retiring  pension  is 
granted  to  each  member  of  the  society  who  has  worked 
for  the  firm  twenty  years.  Sickness  benefits,  medicines, 
and  physicians'  services  are  also  furnished  by  the  society. 
Democratic  administration  is  assured  by  the  Noyau,  con- 
sisting of  about  136  selected  employees.  Membership  is 
open  only  to  Frenchmen  between  25  and  40  years  of  age, 
of  proved  ability  and  high  moral  character.  The  real 
governing  body  of  the  enterprise  is  the  conciliation  com- 
mittee selected  by  the  Noyau;  five  workmen  and  three  other 
employees,  with  one  of  the  managing  partners  as  chairman, 
constitute  this  committee.  The  house  of  Leclaire  is  now 
known  as  Brugniot,  Laurent  &  Company. 

2.  Oodin  Familistdre. — The  Familist&re  de  Guise  is 
known  the  world  over  as  one  of  the  most  successful  schemes 
of  labor  copartnership  and  community  organization.  Its 


508     Profit-Sharing  and  Labor  Copartnership 

founder,  J.  B.  Andre  Godin,  established  a  heating  ap- 
paratus plant  at  Guise  in  1840,  and  was  soon  convinced 
of  the  need  for  an  improved  personnel  policy.  In  1859 
he  started  his  movement  for  the  Familistere.  His  system 
of  profit-sharing  was  introduced  in  1876,  but  was  not  fully 
developed  until  1880,  when  he  established  a  joint  stock 
company  with  various  forms  of  cooperation.  Since  that 
time  many  cooperative  features  have  been  added,  including 
the  care  of  infants  in  groups  by  efficient  nurses,  a  com- 
munity school  with  facilities  for  vocational  education  and 
higher  education,  cooperative  supply  stores  organized  on 
the  Rochdale  plan,  a  community  theater,  and  homes  for 
a  large  proportion  of  the  employees  in  a  ' '  palace ' '  equipped 
to  give  the  greatest  degree  of  comfort,  cleanliness,  beauty, 
and  general  utility.  When  Godin  died  in  1888,  he  be- 
queathed the  company  $600,000. 

The  method  of  dividing  profits  is  determined  by  the  rules 
of  the  society.  Deductions  are  made  from  gross  profits 
to  cover  depreciation  of  buildings,  the  purchase  of  raw 
materials,  items  for  mutual  insurance  funds,  educational 
expenses,  and  interest  payable  to  owners  of  savings  cer- 
tificates. Net  profits  are  distributed  under  the  following 
plan :  75  per  cent  is  paid  as  a  dividend  on  wages  of  labor 
and  the  interest  of  capital;  25  per  cent  as  a  reward  of 
ability,  4  per  cent  of  which  goes  to  the  managing  director, 
16  per  cent  to  the  managing  committee,  and  5  per  cent 
to  capital  stock.  First-class  members  who  live  in  the 
Familistere  form  the  general  council,  which  has  to  be  con- 
sulted for  all  important  matters.  This  body  appoints  the 
committee  of  supervision  and  elects  three  of  its  members 
to  the  committee  of  management.  It  also  appoints  a  new 
managing  director  when  necessary.  The  committee  of  man- 
agement consists  of  the  managing  director,  the  three  elected 
members,  and  ten  heads  of  departments.  Before  the  war 
over  2,700  persons  were  employed,  the  capital  of  $1,200,000 
was  owned  entirely  by  employees,  and  the  annual  business 
amounted  to  $2,300,000.  The  works  and  the  Familistere 
were  destroyed  by  the  Germans  during  the  war,  and  raw 
materials  and  equipment  were  carried  off.  The  loss  was 


Profit-Sharing  and  Labor  Copartnership    509 

put  at  12,600,000  francs,  but  by  a  government  aid  of 
5,000,000  francs  the  work  of  reestablishing  this  interesting 
community  began  in  1920. 

United  Kingdom. — 1.  The  South  Metropolitan  Gas 
Company. — Perhaps  the  best  known  profit-sharing  and  co- 
partnership scheme  in  Great  Britain  is  the  one  introduced 
by  the  South  Metropolitan  Gas  Company  of  London,  in 
1889.  Under  the  original  provisions  each  workman  was 
entitled  to  a  one  per  cent  dividend  on  his  year's  wages 
for  every  penny  reduction  in  the  price  of  gas  per  thousand 
feet.  Those  who  had  been  with  the  company  three  years 
and  accepted  this  scheme  were  credited  with  a  9  per  cent 
nest-egg  on  one  year's  wages,  to  bear  interest  for  three 
to  five  years.  Four  per  cent  was  paid  on  the  deposits 
of  the  regular  annual  bonus.  In  1894  the  percentage  of 
the  bonus  was  increased  on  the  condition  that  one-half 
be  invested  in  the  company's  stock,  the  other  half  being 
payable  annually  in  cash.  Other  modifications  were  made 
from  time  to  time,  and  in  1910  it  was  specified  that  the 
second  half  of  the  bonus  should  be  left  with  the  company 
to  accumulate  at  interest.  This  amount  may  be  invested 
in  stock  with  the  trustees,  or,  under  special  circumstances, 
withdrawn  upon  a  week's  notice. 

The  plan  is  open  to  all  employees,  under  certain  condi- 
tions, and  all  restrictions  on  membership  in  the  Gas  Work- 
ers' Union  have  been  removed.  Since  the  beginning  there 
has  been  a  profit-sharing  committee,  renamed  in  1903  the 
copartnership  committee,  consisting  of  representatives  of 
employee  profit-sharers  and  management,  whose  functions 
consist  in  adjusting  grievances  and  promoting  goodwill. 
Since  1896  employee  directors  have  been  elected  by  the 
officials  and  the  workers.  The  number  of  employee 
directors  is  not  to  exceed  three,  of  whom  one  must  be 
a  salaried  official  and  the  other  two  wage-earners.  The 
voting  strength  of  these  directors  is  only  about  7  per 
cent  of  the  total.  Recently  a  savings  deposit  scheme  has 
been  added,  under  which  employees'  deposits  draw  5  per 
cent  interest.  In  the  majority  of  years  since  the  establish- 
ment of  the  plan  the  ratio  of  the  bonus  to  wages  and 


510    Pro  fit-Sharing  and  Labor  Copartnership 

salaries  has  been  7y2  per  cent  or  more.  No  bonus  is  paid 
when  the  price  of  gas  falls  below  a  prescribed  base. 

2.  Lever  Brothers  Company. — Lord  Leverhulme,  chair- 
man of  this  famous  soap  manufacturing  concern,  intro- 
duced a  copartnership  scheme  in  1909.  The  plan  provides 
for  the  issue  of  partnership  certificates  which  are  allotted 
to  employees  who  are  considered  desirable  partners,  the 
total  issue  not  to  exceed  $5,000,000  par  value.  There  are 
now  about  6,000  partners.  Each  copartner  must  be  over 
twenty-two  years  of  age,  have  a  record  of  four  years' 
service  with  the  company,  and  agree  to  fulfill  his  duties 
faithfully.  Partnership  certificates  entitle  him  to  a  share 
in  the  profits.  The  number  of  certificates  allotted  to  each 
copartner  depends  upon  the  recommendations  of  his  fore- 
man or  some  other  superior  official,  but  there  exists  a 
right  of  appeal  from  this  recommendation.  Dividends 
were  originally  paid  in  the  form  of  a  credited  bank  ac- 
count, but  now  in  5  per  cent  cumulative  preferred  shares 
disposable  at  the  will  of  the  holder.  For  the  various 
classes  of  employees  there  is  a  maximum  of  shares  that 
may  be  owned,  the  amount  being  from  two  to  four  times 
the  annual  wage.  Within  recent  years  both  the  number 
of  copartners  and  the  value  of  preferential  certificates 
held  by  them  have  more  than  doubled.  Employees  are 
not  represented  on  the  board  of  directors,  but  with  few 
exceptions  all  directors  have  been  employees  in  the  service 
of  the  company. 

Preferential  certificates  are  issued  in  exchange  for  part- 
nership certificates  in  case  an  employee  leaves  the  service 
of  the  company,  the  nominal  amount  of  such  certificates 
bearing  an  established  ratio  to  dividends  received  or  part- 
nership certificates  held.  Preferential  certificates  are  can- 
celed upon  the  death  of  an  employee,  except  where  a 
widow  is  left ;  separation  from  the  employ  of  the  company 
to  establish  other  employment  relations  without  having 
secured  in  writing  the  consent  of  the  trustees;  or  the 
transfer  of  certificates  to  persons  other  than  the  original 
owner.  In  addition  to  these  plans  there  exists  the  "Lever 
Brothers'  Employees'  Benefit  Fund."  The  entire  scheme 


Profit-Sharing  and  Labor  Copartnership     511 

is  administered  by  a  committee  consisting  of  twelve  per- 
sons, three  nominated  by  those  constituting  the  manage- 
ment class,  three  by  those  in  the  salesman  class,  three 
by  the  staff  class,  and  three  by  the  holders  of  preferential 
certificates. 

United  States. — 1.  N.  0.  Nelson  Company. — Among  the 
oldest  and  most  successful  profit-sharing  plans  in  the 
United  States  is  that  of  the  N.  0.  Nelson  Company,  St. 
Louis,  Missouri,  manufacturers  of  plumbing  supplies.  Mr. 
Nelson  started  sharing  profits  with  his  employees  in  the 
year  1886,  on  the  basis  of  paying  6  per  cent  interest  on 
capital  and  then  dividing  the  surplus  proportionally  on 
the  total  capital  and  the  total  wages  for  the  year.  In 
the  following  year  it  was  arranged  that  after  payment 
of  6  per  cent  on  capital  and  10  per  cent  for  a  reserve  fund, 
10  per  cent  of  the  surplus  should  go  to  a  provident  fund 
and  5  per  cent  to  an  educational  fund.  At  the  present 
time,  after  payment  of  the  6  per  cent  on  capital,  the 
remainder  of  net  profits  is  divided  in  equal  percentage 
on  the  capital  stock  and  on  the  wages  of  employees  who 
have  been  with  the  company  six  months.  Dividends  to 
employees  are  allowed  to  accumulate  to  their  credit  and 
are  then  paid  to  them  in  stock  of  the  company.  About 
1,000  employees  participate  in  stock  ownership.  Before 
an  employee  receives  a  stock  certificate  representing  his 
profit-sharing  dividend,  he  must  have  been  with  the  com- 
pany three  years,  but  if  he  leaves  the  service  of  the  com- 
pany before  the  end  of  this  period  he  loses  his  accumulated 
dividend.  Employees  are  forbidden  to  sell  their  shares 
while  in  the  service  of  the  firm,  but  in  meritorious  cases 
the  company  will  repurchase  the  stock.  Numerous  com- 
munity enterprises  are  promoted  by  the  firm  to  improve 
the  life  of  the  workers. 

2.  Bollard  and  Bollard  Company. — This  firm  introduced 
its  profit-sharing  plan  in  1886,  in  its  flour  mills  at  Louis- 
ville, Kentucky,  by  apportioning  to  its  miller  5  per  cent 
of  the  net  profits  of  the  business  as  a  supplementary  wage. 
In  1887  the  plan  was  extended  and  it  was  provided  that 
10  per  cent  of  the  profits  should  be  shared  with  employees 


512    Profit-Sharing  and  Labor  Copartnership 

in  the  office  and  in  the  mill.  This  amount  was  gradually 
increased  until  in  1914  it  amounted  to  about  one-third  of 
the  profits,  payable  before  any  dividend  was  distributed 
among  stockholders.  At  the  present  time  employees  who 
have  worked  for  the  company  two  years  begin  to  par- 
ticipate in  an  amount  equal  to  10  per  cent  of  the  net 
profits  for  the  preceding  year,  the  dividend  being  in  pro- 
portion to  wages.  Certain  employees  receive  a  special 
dividend  of  1  to  5  per  cent  of  the  profits  in  addition 
to  their  salaries.  The  total  distribution  to  employees 
amounts  to  about  46  per  cent  of  the  net  profits.  There 
is  also  an  arrangement  whereby  the  wages  of  employees 
are  automatically  increased  from  year  to  year. 

3.  Procter  and  Gamble. — This  well-known  soap  manu- 
facturing company  of  Cincinnati,  Ohio,  established  its 
profit-sharing  plan  in  1887,  to  secure  the  loyalty  and 
cooperation  of  its  employees.  The  original  plan  provided 
that,  after  payment  of  a  reasonable  salary  to  active  mem- 
bers of  the  firm  and  other  expenses  of  manufacturing,  net 
profits  should  be  divided  between  the  company  and  its 
employees  in  the  ratio  that  labor  charges  in  production 
bore  to  the  total  expense  of  production.  In  1903  the 
plan  was  modified  and  stock  ownership  dividends  were 
introduced.  With  slight  changes  it  is  still  in  existence.  The 
company  reserves  the  right  to  terminate  the  scheme  at  the 
end  of  any  fiscal  year.  Employees  earning  not  more  than 
$2,000  per  annum,  except  salesmen  and  traveling  repre- 
sentatives, may  purchase  the  common  stock  of  the  com- 
pany at  market  price,  to  an  amount  equal  to  their  annual 
wages.  A  subscribing  employee  pays,  at  the  time  of 
purchase,  2y2  per  cent  of  the  cost  of  the  stock,  and  not 
less  than  4  per  cent  additional  each  year  until  the  sub- 
scription is  complete,  interest  of  3  per  cent  per  annum 
being  charged  on  unpaid  balances.  Dividends  on  stock 
are  credited  to  the  purchase  account,  and  in  addition 
each  subscriber  is  given  a  trust  certificate  guaranteeing 
him  dividends  at  the  rate  of  16  per  cent  per  annum  upon 
the  wages  actually  earned,  provided  he  has  been  in  the 
continuous  employ  of  the  company  for  at  least  six  months. 


Profit- Sharing  and  Labor  Copartnership     513 

These  trust  certificate  dividends  are  credited  to  the  pur- 
chasing account.  Employees  who  have  been  in  the  service 
of  the  company  five  or  ten  years  may  increase  their  stock 
subscriptions  respectively  to  125  and  150  per  cent  of  their 
annual  wages,  and  receive  trust  certificate  dividends  of 
20  and  24  per  cent  respectively.  Increased  stock  sub- 
scriptions are  allowed  with  increases  in  wages. 

Employees  who  withdraw  from  the  plan  in  less  than 
two  years  after  subscription,  or  before  35  per  cent  of  the 
stock  purchase  price  has  been  credited  to  their  account, 
are  entitled  to  a  refund  of  only  the  amount  of  cash  paid 
in.  If  they  leave  after  fulfilling  these  conditions  they 
may  withdraw  their  cash  payments  plus  all  dividends 
credited  to  them.  Special  settlements  are  made  for  em- 
ployees who  resign  or  are  discharged.  At  the  present  time 
employees  own  more  than  $1,600,000  of  the  company's 
stock. 

Loss  Sharing. — There  arc  a  few  instances  in  the  United 
States  in  which  employees  who  participate  in  profits  also 
share  in  losses,  through  the  creation  of  a  sinking  fund 
to  cover  deficits  in  poor  years.  The  Garner  Print  Works 
and  Bleachery  of  Garnerville,  New  York,  which  has  a 
profit-sharing  and  copartnership  scheme,  sets  aside  15  per 
cent  of  net  profits  as  a  sinking  fund  for  losses.  Other 
companies  provide  protection  for  stockholders,  and  in  this 
way  the  workers'  share  in  profits  is  diminished,  so  they; 
participate  indirectly  in  losses.  The  most  noteworthy  ex- 
ample of  loss  sharing,  however,  is  the  plan  of  the  A.  W. 
Burritt  Company,  lumber  and  timber  dealers,  Bridgeport, 
Connecticut,  which  was  introduced  in  1900.  This  com- 
pany employs  between  250  and  300  workers,  of  whom 
about  125  arc  included  in  the  profit-  and  loss-sharing 
contract.  The  plan  is  really  limited  to  skilled  workers 
and  is  optional,  but  those  who  sign  the  agreement  assume 
responsibility  for  losses.  In  order  to  build  up  a  reserve 
against  emergencies,  10  per  cent  of  the  wages  of  par- 
ticipating employees  is  deducted  from  the  weekly  pay 
envelope.  If  looses  arc  sustained,  the  workers  propor- 
tionate share  is  deducted  from  the  reserve  fund  at  the 


514     Profit-Sharing  and  Labor  Copartnership 

end  of  the  year.  If  no  losses  occur,  the  reserve  accumu- 
lated from  wages,  together  with  the  share  of  profits,  is 
paid  to  the  workers.  Invested  capital  is  apportioned  6 
per  cent  interest  and  all  expenses;  depreciation  of  build- 
ings, tools,  and  machinery,  and  bad  debts  are  taken  care 
of  before  employees  are  allowed  to  participate  in  profits. 
A  worker's  share  in  losses  is  in  no  case  to  exceed  the 
amount  reserved  from  his  wages  for  that  purpose.  There 
has  never  been  a  loss  since  the  inception  of  the  plan, 
and  participating  employees  have  received  an  average 
profit  of  6  per  cent  on  their  annual  earnings.  Greater 
cooperation  and  efficiency  are  named  among  the  results 
of  this  scheme. 

Those  who  favor  loss  sharing  by  employees  defend  their 
position  by  pointing  out  that:  (1)  To  pay  employees 
a  share  of  the  net  profits  of  industry  without  imposing 
upon  them  a  corresponding  responsibility  for  losses  is 
inequitable,  because  it  confers  rights  without  obligations ; 
and  (2)  profit-sharing  schemes  will  prove  more  effective, 
and  will  conduce  to  greater  care  in  workmanship  and 
in  the  use  of  materials  and  equipment,  if  employees  are 
called  upon  to  participate  in  losses. 

Advocates  of  profit-sharing  and  labor  copartnership, 
however,  do  not  usually  endorse  the  sharing  of  losses  by 
employees.  There  are  several  reasons  why  the  workers 
should  not  be  called  upon  to  share  in  losses.  (1)  Profit- 
sharing  is  designed  primarily  for  the  division  of  the  dif- 
ferential, and  not  the  division  of  risks.  Workers  suffer 
sufficiently  in  being  compelled  to  forego  the  anticipated 
share  in  profits.  (2)  Loss  sharing  is  very  likely  to  result 
in  injustice,  since  the  losses  incurred  may  be  caused  not 
by  the  lack  of  effort  or  efficiency  on  the  part  of  the  work- 
ers but  by  inefficient  methods  of  administration  and  man- 
agement, which  are  beyond  the  workers'  control.  Great 
discontent  arises  when  the  workers,  after  putting  forth 
every  effort,  find  themselves  called  upon  to  share  deficits. 
(3)  It  is  unfair  to  require  workers  to  share  losses,  since 
they  are  constantly  forced  to  accept  as  a  normal  burden 
of  industry  curtailment  of  working  time,  discharge,  and 


Profit-Sharing  and  Labor  Copartnership    515 

other  conditions  that  result  in  unemployment.  Economic 
insecurity  in  modern  industry  precludes  the  possibility 
of  the  workers  assuming  a  share  of  general  losses.  (4) 
The  workers  are  not  able  financially  to  participate  in  the 
deficits  of  industry  and  business.  Because  of  a  lack  of 
effective  organization,  the  income  of  the  average  wage- 
earner  is  insufficient  to  provide  a  decent  standard  of  liv- 
ing, much  less  a  financial  reserve  for  the  sharing  of  losses. 
There  is  very  little  reason  to  believe  that  loss  sharing  will 
be  widely  extended  under  industry  as  organized  and  ad- 
ministered at  present.  Such  a  responsibility  might  be 
practicable  and  just  where  the  workers  are  real  industrial 
partners  with  management  and  capital,  but  this  ideal  part- 
nership has  not  yet  been  realized. 

The  Deficiencies  of  Profit-Sharing1. — Experiences  with 
profit-sharing  in  many  countries  indicate  that  there  has 
been  a  very  high  percentage  of  abandonments.  In  the 
United  States  and  Great  Britain  abandonments  have  been 
caused  by  the  inability  of  the  concerns  to  earn  sufficient 
profits,  or  to  some  other  condition  independent  of  the 
plans  themselves,  rather  than  to  fundamental  deficiencies 
inherent  in  the  system  of  profit-sharing.  Numerous  spe- 
cific causes  have  operated,  including  (1)  altered  circum- 
stances, such  as  death  of  the  employer  or  change  in 
ownership  and  management;  (2)  diminished  profits, 
brought  about  chiefly  by  business  depression  and  hard 
times;  (3)  liquidation  or  dissolution  resulting  from  ineffi- 
cient management,  or  disagreement  among  partners 
concerning  policies  of  administration;  and  (4)  dissatis- 
faction with  the  results  of  the  scheme.  The  majority  of 
profit-sharing  plans  have  been  discontinued  because  the 
employer  has  been  convinced  that  the  results  did  not  com- 
pensate for  the  financial  outlay  involved,  or  because  the 
employees  have  become  dissatisfied  and  antagonistic.  Re- 
cent investigations  have  indicated  that  in  more  than  half 
of  the  schemes  abandoned  the  prevailing  cause  was 
apathy,  dissatisfaction,  or  antagonism  on  the  part  of 
the  workers.  Among  the  commonest  complaints  of  em- 
ployers who  have  discontinued  their  plans  are:  that  as 


516    Profit-Sharing  and  Labor  Copartnership 

an  incentive  to  efficiency  the  schemes  reached  only  a 
minority  of  the  employees;  that  this  incentive  diminished 
as  the  novelty  wore  off ;  and  that  employees  looked  upon 
the  bonus  as  a  matter  of  course  when  paid,  while  in  poor 
years  when  no  profits  were  distributed  great  discontent 
resulted. 

The  failure  of  profit-sharing  can  be  attributed  in  no 
small  measure  to  the  constant  opposition  of  organized 
labor,  which  has  objected  that  the  prevailing  market  rate 
of  wages  is  not  paid  where  cash  bonuses  are  distributed; 
labor  would  prefer  to  have  a  fixed  rate  of  wages  which 
can  be  relied  upon;  such  schemes  are  intended  to  wean 
away  employees  from  their  unions,  in  order  that  they  may 
not  be  in  a  position  to  bargain  advantageously  for  higher 
wages,  a  shorter  work-day,  and  improved  conditions;  the 
schemes  are  used  for  speeding  up  the  workers,  an  increase 
in  pay  being  accompanied  by  "intensified  supervision, 
irritating  interference,  and  humiliating  patriarchal  domina- 
tion." "Profit-sharing  as  developed  in  sporadic  ex- 
amples, has  had  no  effect  in  the  elevation  of  the  whole 
mass  of  wage-earners.  It  has  not  been  a  part  of  the  world- 
wide labor  movement  ...  it  has  in  many  ways  narrowed 
the  workman's  social  vision.  He  has  seen  no  further  than 
his  own  workshop;  he  has  concentrated  his  mind  on  his 
own  immediate  well-being.  The  effects  of  the  voluntary  in- 
clusive association  of  all  the  workers  of  his  occupation 
have  been  beyond  his  mental  horizon."  5 

The  Benefits  of  Profit-sharing. — Employers  who  have 
been  successful  in  the  application  of  profit-sharing  con- 
tend that  it  has  reduced  labor  turnover,  encouraged  regu- 
larity of  service,  diminished  the  cost  of  production, 
effected  economies  in  the  use  of  materials,  resulted 
in  greater  care  of  machinery,  increased  efficiency,  led  to 
industrial  peace,  stimulated  home  ownership  and  thrift, 
and,  in  general,  promoted  cooperation,  loyalty,  and  indus- 
trial goodwill.  Success  has  depended  very  largely  upon 
adherence  to  certain  fundamental  principles.  (1)  There 
has  been  recognition  and  payment  of  the  prevailing  rate 

6  Statement  of  J.  W.  Sullivan,  General  Lecturer  for  the  A.  F.  of  L. 


Profit-Sharing  and  Labor  Copartnership     517 

of  wages;  (2)  the  percentage  of  profits  to  be  distributed 
has  been  designated  in  advance;  (3)  provision  has  been 
made  for  the  representation  of  employees  on  the  admin* 
istrative  committee  and  an  opportunity  given  them  to  as- 
certain the  earnings  of  the  company;  (4)  profits  have 
been  sufficiently  high  to  stimulate  cooperation  and  loy- 
alty; and  (5)  especial  care  has  been  exercised  in  adapt- 
ing the  plans  to  the  particular  needs  of  the  establishment. 
Departure  from  these  principles  has  spelled  failure.  Mr. 
A.  W.  Burritt,  an  employer  with  wide  experience  in  profit- 
sharing,  has  observed:  "Any  plans  of  this  nature,  in  order 
to  be  successful,  are  vitally  dependent  on  the  person  who 
has  their  introduction  and  care  in  charge.  Human,  per- 
sonal relationship ;  mutual  confidence ;  close  attention  to 
individual  worth ;  honest  remuneration ;  a  clean,  attractive, 
sanitary  shop;  and  a  square  deal  without  .charity  are  the 
important  points." 

Conclusions. — Profit-sharing  cannot  be  considered  a 
panacea  for  the  ills  of  industrial  society;  it  by  no  means 
constitutes  a  practical  substitution  for.  the  wage  system, 
nor  does  it  solve  the  wage  problem.  (As  a  stimulus  to 
industrial  efficiency,  profit-sharing  has  been  less  effective 
than  the  piece-rate  wage  and  other  forms  of  progressive 
wage  payment.  As  usually  applied,  the  schemes  are  pater- 
nalistic. No  plan  orginated  and  administered  by  the  em- 
ployer alone  can  solve  our  industrial  problems.  This 
difficulty  will  be  removed  as  true  labor  copartnership 
is  developed.  The  problem  of  industrial  unrest  has  not 
disappeared  from  plants  which  share  profits  with  their 
workers;  indeed,  in  many  cases  these  plans  have  ac- 
centuated strife.  Many  conditions  necessarily  enter  into 
the  success  of  profit-sharing  as  a  temporary  expedient 
in  helping  to  solve  problems  of  industrial  relations. 
Among  these  factors  are  the  stability  and  profitableness 
of  the  enterprise ;  the  intelligence  and  types  of  workers  em- 
ployed, whether  skilled  or  unskilled,  conservative  or  radi- 
cal ;  the  presence  or  absence  of  unions  and  the  attitude  of 
organized  workers;  and,  finally,  the  willingness  of  em-x. 
ployers  to  introduce  democratic  methods  of  management.  ' 


518    Profit- Sharing  and  Labor  Copartnership 


SELECTED  REFERENCES 

ADAMS,   T.    S.,   AND   SUMNER,  H.   L.,  Labor  Problems,  1905, 

Chap.  IX. 

BOLEN,  G.  L.,  Getting  a  Living,  1903,  Chap.  V. 
BURRITT,  A.  W.  AND  OTHERS,  Profit-Sharing,  1918. 
CARLTON,  F.  T.,  The  History  and  Problems  of  Organized  Labor, 

revised  edition,  1920,  Chap.  VIII. 
COMMONS,  J.  R.  (editor),  Trade  Unionism  and  Labor  Problems, 

revised  edition,  1921,  Chaps.  XV,  XVI,  XIX  and  XX. 
EMMET,  BORIS,  Profit-Sharing  in  the  United  States,  Jour,  of  Pol. 

Econ.,  26:1019-1033,  1917. 
OILMAN,  N.  P.,  A  Dividend  to  Labor,  1899. 
GREAT  BRITAIN,  MINISTRY  OF  LABOR,  Profit-Sharing  and  Labor 

Copartnership,  1920. 
JONES,  E.  D.,  The  Administration  of  Industrial  Enterprises,  1916, 

Chaps.  XIV  and  XV. 
NATIONAL  Civic  FEDERATION,  WELFARE  DEPARTMENT,  NEW  YORK 

CITY,  Profit-sharing  by  American  Employers,  1920. 
NATIONAL   INDUSTRIAL   CONFERENCE   BOARD,   NEW   YORK   CITY, 

Practical  Experience  with  Profit-Sharing  in  Industrial  Es- 
tablishments, 1920. 
SCHLOSS,    D.   F.,  Methods  of  Industrial  Remuneration,  second 

edition,  1894. 
SEAGER,  H.  R.,  Principles  of  Economics,  revised  edition,  1917, 

Chap.  XXXI. 
TEAD,  ORDWAY,  AND  METCALF,  H.  C.,  Personnel  Administration, 

1920,  Chaps.  XXIII-XXV. 
UNITED   STATES   BUREAU   OF  LABOR   STATISTICS,   Bulletins   123 

(1913),  208  (1917). 
WEBB,  CATHERINE  (editor),  Industrial  Cooperation,  1919,  Chap. 

XVII. 
WILLIAMS,  ANEURIN,  Copartnership  and  Profit-Sharing,  1913. 


CHAPTER  XXII 
INDUSTRIAL  EDUCATION  AND  TRAINING 

The  Need  for  Technical  Education. — The  term  "indus- 
trial education"  is  used  generally  to  designate  numerous 
methods  and  varieties  of  education  and  training  of  a  tech- 
nical nature,  that  attempt  to  fit  the  individual  for  a  life 
of  useful  service  in  the  trades  and  professions.  It  is  a 
recognition  of  the  fact  that  for  the  average  individual 
knowledge  must  be  expressed  in  terms  of  relation  to  life 
in  industry,  business,  and  commerce,  as  well  as  to  the 
social  and  political  organization.  The  movement  for  vo- 
cational education  develops  from  two  well-defined  con- 
victions;  namely,  (1)  that  the  present  system  of  public- 
school  education  is  inadequate  to  meet  the  needs  of  the 
average  child  who  must  enter  industry  at  an  early  age, 
and  (2)  that  the  present  minute  specialization  of  training 
in  industry  is  not  sufficiently  comprehensive  to  give  the 
individual  a  well-rounded  preparation  for  any  trade  or 
calling  in  the  factory,  mercantile  establishment,  or  large 
industry.  Provision  must  be  made,  therefore,  for  greater 
correlation  between  the  theories  of  the  classroom  and  the 
facts  of  industrial  experience. 

In  most  of  the  trades  in  which  entrance  depends  upon 
a  specified  period  of  apprenticeship,  whether  prescribed 
by  trade  unions  to  protect  the  labor  market  or  by  em- 
ployers because  of  the  intricacies  of  the  trade,  there  is 
general  complaint  that  the  apprentice  is  not  given  the  op- 
portunity to  master  the  trade.  The  causes  of  this  de- 
ficiency in  trade  training  have  been  suggested  by  Pro- 
fessor George  E.  Barnett:  "In  the  first  place,  with  the 
increasing  size  of  the  shop,  specialization  has  become  the 
mark  of  a  well-organized  plant.  The  apprentice  is, 


520      Industrial   Education   and    Training 

therefore,  most  conveniently  and  profitably  disp'osed  of 
by  allowing  him  to  follow  some  one  operation.  The  result 
is  that  at  the  end  of  his  apprenticeship  he  is  proficient 
in  only  a  small  part  of  the  trade.  Secondly,  with  the 
increasing  size  of  the  shop  and  the  specialization,  the  ap- 
prentice receives  little  instruction.  Thirdly,  in  a  con- 
siderable number  of  trades  the  advancing  technique  re- 
quires that  the  apprentice  shall  have  instruction  of  a 
kind  which  cannot  be  furnished  in  the  shop,  since  the 
knowledge  required  can  only  be  gained  by  formal  instruc- 
tion."1 The  failure  to  enforce  plans  of  progression  so 
that  the  apprentice  shall  become  familiar  with  all  the 
phases  of  the  trade  is  injurious  to  the  ultimate  interests 
of  the  apprentice,  the  employer,  and  the  nation.  For  this 
reason,  standardization  of  entrance  requirements  for  the 
various  trades  is  expedient,  whether  enforced  by  trade 
union  agreements  with  associations  of  employers,  by  em- 
ployers independent  of  trade  unions  or  by  law.  More- 
over, an  introductory  training  of  a  few  years  may  well 
be  provided  in  the  public  schools. 

There  is  abundant  evidence  of  the  need  for  vocational 
education.  The  Federal  Board  for  Vocational  Education 
has  estimated  that  in  one  year  the  number  of  minors  in 
the  United  States  between  the  ages  of  14  and  15  gainfully 
employed  is  approximately  800,000  boys  and  400,000  girls, 
or  more  than  one-half  of  the  entire  number  of  children 
between  these  ages.  Reports  issued  by  the  United  States 
Bureau  of  Labor  Statistics  indicate  that  an  army  of  1,000,- 
000  children  14  years  of  age  leave  school  every  year,  and 
that  a  large  number  of  these  have  not  completed  the 
work  beyond  the  fifth  or  sixth  grade.  The  Commission 
on  National  Aid  to  Vocational  Education  reported  in  1914 
that  10  per  cent  of  the  children  in  the  United  States  leave 
school  before  attaining  the  age  of  13 ;  40  per  cent  by  the 
time  they  are  14 ;  70  per  cent  by  the  time  they  are  15 ;  and 
85  per  cent  by  the  time  they  are  16.  On  an  average  the 
schools  in  this  country  hold  the  children  up  to  the  fifth 
grade,  but  large  numbers  leave  before  reaching  that 

*" Trade  Agreements  and  Industrial  Education,"  p.  5. 


Industrial  Education  and  Training 

grade.8  Similar  information  is  available  for  Great  Britain, 
where  the  Committee  on  Juvenile  Education  reported  in 
1917  that  the  aggregate  enrollment  in  the  public  full- 
time  day  schools  (elementary,  secondary,  and  junior  tech- 
nical) reached  its  maximum  of  about  662,000  between 
12  and  13  years  of  age,  when  it  represented  about  95  per 
cent  of  the  total  juvenile  population  of  that  age.  Only 
84,000,  or  13  per  cent  of  this  number,  are  likely  to  have 
received  any  fragment  of  full-time  education  after  the 
age  of  14,  and  not  more  than  5  per  cent  can  have  received 
education  in  the  secondary  schools.  Although  public  edu- 
cation beyond  the  elementary  grades  is  almost  entirely 
part-time,  very  little  provision  is  made  for  it, 

The  need  for  industrial  education  is  also  apparent  from 
examination  of  the  problem  of  industrial  efficiency.  The 
Training  Service  of  the  United  States  Department  of 
Labor  gathered  and  analyzed  statistical  data  which  show 
that  for  want  of  adequate  training  the  output  of  con- 
siderably more  than  7,000,000  of  the  10,000,000  workers 
in  the  manufacturing  establishments  of  this  country  is 
less  than  35  per  cent  of  what  it  could  and  should  be  made, 
without  subjecting  the  workers  either  to  excessive  speed 
or  to  exploitation.  The  lack  of  industrial  training  is  a  re- 
sponsible factor  in  this  inefficiency,  as  well  as  in  the  ex- 
cessive turnover  of  labor  which  costs  this  nation  about 
$200,000,000  annually.  There  are  at  least  6,000  American 
manufacturers  employing  groups  of  more  than  250  per- 
sons, and  yet  facilities  for  part-time  training  are  available 
in  comparatively  few  of  their  factories.3 

Vocational  Education  in  the  United  States. — With  the 
passing  of  the  old  apprenticeship  system  there  has  been 
a  gradual  awakening  to  the  need  for  a  suitable  substitute. 
Many  innovations  have  been  made  in  the  educational  sys- 
tem, in  an  effort  to  balance  technical  with  cultural  edu- 
cation. "Educators  have  opposed  the  desire  of  business 
to  attach  the  schools  to  the  industrial  enterprise.  They 
have  rightly  opposed  it  because  industry,  under  the  in- 

»  Report,  Vol.  I,  p.  24. 

'Bulletin!  No.  8,  pp.  2,  4;  No.  9,  pp.  1-5. 


522        Industrial  Education  and  Training 

fluenee  of  business,  prostitutes  effort.  Nevertheless,  hand 
in  hand  with  industry,  the  schools  must  function;  un- 
attached to  the  human  hive  they  are  denied  participation 
in  life.  Promoters  of  industrial  education  are  hung  be- 
tween this  fact  of  prostituted  industry  and  their  desire 
to  establish  the  children's  connection  with  life."4 

Manual  training  courses  are  now  common  in  the  public- 
school  curriculum,  and  are  designed  to  give  the  child 
elementary  knowledge  in  the  use  of  tools.  The  trade 
school  aims  to  give  the  apprentice  a  thorough  and  prac- 
tical knowledge  of  some  particular  craft;  a  short,  inten- 
sive training  is  often  given  in  the  theory  and  practice  of 
such  trades  as  bricklaying,  stone  masonry,  painting, 
plastering,  and  carpentering.  In  the  manual  training 
courses  manual  practice  in  wood  and  iron  work  is  sub- 
ordinated to  the  general  educational  purposes,  whereas 
in  the  trade  school  the  learning  of  a  trade  for  immediate 
economic  advantage  is  the  purpose.  Technical  high 
schools,  institutes  of  technology,  and  numerous  engineer- 
ing colleges  have  been  established  to  give  more  thorough 
knowledge  of  the  theoretical  and  practical  aspects  of  the 
technique  of  industry,  offering  curricula  in  mechanical, 
civil,  electrical,  and  sanitary  engineering. 

Persistent  efforts  made  in  the  years  immediately  pre- 
ceding the  outbreak  of  the  war  in  Europe  culminated  in 
the  1914  report  of  the  Congressional  Commission  on  Na- 
tional Aid  to  Vocational  Education.  The  substance  of 
the  recommendations  of  this  commission  expressed  a  gen- 
eral popular  demand  that  had  been  gathering  strength  for 
more  than  a  decade;  namely,  that  our  public-school  educa- 
tion should  be  democratized  and  should  be  reconstructed 
to  take  account  of  the  practical  needs  of  the  youth  of  the 
nation.  Acting  upon  the  suggestions  of  the  commission, 
Congress,  on  February  23,  1917,  enacted  the  Federal  Vo- 
cational Education  Act,  popularly  known  as  the  Smith- 
Hughes  Law,  embodying  a  program  for  "the  progres- 
sive improvement  of  our  public-school  educational  system, 
a  program  for  making  that  system  less  academic  and 

*  Helen  Marot,  Creative  Impulse  in  Industry,  Introduction,  xiv. 


Industrial  Education  and  Training        523 

more  vital  and  purposeful  in  serving  the  permanent  social 
and  economic  needs  of  the  community."5  The  commis- 
sion had  found  a  condition  of  vocational  unpreparedness 
for  maintaining  our  agricultural,  industrial  and  commer- 
cial position  and  prosperity,  a  condition  which  must  be 
remedied  if  the  United  States  is  to  compete  successfully 
in  the  markets  of  the  world  with  nations  such  as  Ger- 
many, that  have  built  up  national  systems  of  vocational 
training.  American  labor  must  be  made  as  vocationally 
skilled  and  efficient  as  the  labor  of  other  countries.  For 
such  a  task  the  Federal  Board  for  Vocational  Education 
was  provided  in  the  act  of  1917. 

The  Federal  Board  for  Vocational  Education  was  or- 
ganized in  August,  1917,  and  within  one  year  every  state 
in  the  union  had  officially  accepted  the  federal  law  and 
declared  its  intention  of  cooperating  with  the  federal 
government  in  the  promotion  of  vocational  education  in 
the  public  schools  and  in  the  provision  of  adequate  facili- 
ties for  training  vocational  teachers.  There  may  be  es- 
tablished under  the  federal  law  unit  trade  schools,  gen- 
eral industrial  schools,  part-time  general  continuation 
schools,  and  evening  schools.  The  federal  government 
undertakes  to  subsidize  these  institutions  with  an  amount 
equal  to  that  furnished  from  state  and  local  funds.  Be- 
tween 1918  and  1921  inclusive,  more  than  $30,000,000  was 
spent  cooperatively  by  federal,  state,  and  local  govern- 
ments on  vocational  education.  The  allotment  of  federal 
funds  for  this  purpose  in  the  fiscal  year  of  1922  is  approxi- 
mately $4,121,000;  in  1923,  $4,615,000 ;  in  1924,  $5,190,000; 
in  1925,  $6,169,000;  and  in  1926,  $7,155,000.  The  equiva- 
lent of  the  amount  for  1926  is  to  be  available  annually 
thereafter.  These  amounts,  it  must  be  remembered,  are 
to  be  matched  by  the  funds  appropriated  by  state  and 
local  governments.  The  rapidity  with  which  this  national 
movement  for  vocational  education  has  grown  is  sug- 
gested by  the  fact  that  the  number  of  vocational  schools 
federally  aided  increased  from  1,741  in  1918,  to  3,859  in 

•Federal  Board  for  Vocational  Education,  Fifth  Annual  Report, 
1921,  p.  17. 


524        Industrial  Education  and  Training 

1921;  the  number  of  teachers  from  5,257  to  9,906;  the 
number  of  pupils  from  164,186  to  305,224 ;  the  number  of 
teacher-training  courses  from  524  to  1,109;  and  the 
number  of  pupils  in  teacher-training  courses  from  6,589 
to  14,755. 

The  federal  law  imposes  the  limitation  that  one-third 
of  the  trade  and  industrial  fund  must  be  devoted  to  the 
promotion  and  support  of  part-time  schools  and  classes. 
This  clause  has  had  the  greatest  influence  on  state  legis- 
lation. More  than  one-third  of  the  amount,  or  even  the 
full  sum,  may  be  used  for  this  purpose  at  the  discretion 
of  state  authorities.  Under  this  provision  a  large  number 
of  states  have  enacted  compulsory  or  permissive  part-time 
school  attendance  laws,  and  have  developed  rapidly  facili- 
ties for  giving  vocational  and  general  continuation  part- 
time  instruction  to  boys  and  girls  14  to  18  years  of  age 
who  have  left  school.  Part-time  schools  are  apparently 
the  most  important  type  in  relation  to  industry,  since  in- 
struction must  be  given  during  the  hours  of  employment. 
Such  instruction  may  constitute  preparation  for  a  trade 
entirely  different  from  the  one  in  which  the  youth  is  earn- 
ing a  living ;  or  it  may  be  of  a  general  nature,  adapted  to 
the  development  of  the  civic,  cultural,  and  vocational  in- 
telligence of  the  young  worker.  In  any  case,  the  schools 
are  required  to  operate  at  least  144  hours  every  year 
during  the  period  of  regular  employment.  In  most  states 
the  attendance  requirement  is  8  hours  a  week  and  the 
length  of  the  school  year  is  the  same  as  for  the  public 
schools.  Some  states  specifically  require  that  the  hours 
of  instruction  shall  fall  between  8  a.m.  and  5  or  6  p.m. 
One  of  the  greatest  deficiencies  in  the  laws  is  that  penal- 
ties imposed  for  violation  are  inadequate.  The  Illinois 
law,  as  amended  in  1921,  not  only  compels  attendance 
at  part-time  continuation  schools  of  all  minors  between 
14  and  18  years  of  age  in  any  city  or  school  district  where 
facilities  are  available,  but  also  imposes  a  fine  of  not  less 
than  $25  and  not  more  than  $100  upon  any  person,  firm, 
or  corporation  willfully  violating  the  law. 

Vocational  rehabilitation  of  the  civilian  disabled  is  a 


Industrial  Education  and  Training        525 

duty  which  governments  have  been  slow  to  recognize 
and  assume.  Those  disabled  in  industry  comprise  a  casu« 
alty  list  of  which  the  public  takes  little  notice,  although  it 
is  comparable  to  the  mass  of  casualties  incident  to  the 
World  War.  These  unfortunate  wage-earners  are  entitled 
to  something  more  than  money  compensation  for  their 
injuries,  and  it  is  to  the  best  interests  of  society  to  give 
them  the  opportunity  for  economic  rehabilitation.  Eco- 
nomic service  to  the  community  should  receive  no  less 
generous  recognition  than  military  or  naval  service.  The 
Federal  Act  for  Civilian  Rehabilitation,  which  became 
effective  June  2,  1920,  provides  for  cooperation  of  the 
federal  government  with  the  states  in  returning  to  re- 
munerative occupations  civilians  disabled  in  industry  or 
otherwise.  It  covers  "any  person  who,  by  reason  of  a 
physical  defect  or  infirmity,  whether  congenital  or  ac- 
quired by  accident,  injury,  or  disease,  is  or  may  be  ex- 
pected to  be  totally  or  partially  incapacitated  for  re- 
munerative occupation."  The  term  rehabilitation  is  con- 
strued to  mean  the  rendering  fit  for  remunerative  occu- 
pations persons  who  are  disabled.  For  the  promotion  of 
this  work  an  appropriation  of  $750,000  for  the  fiscal  year 
1921,  and  of  $1,000,000  for  each  of  the  three  subsequent 
years  is  provided,  to  be  apportioned  to  the  states  on  the 
basis  of  population,  no  state  to  receive  less  than  $5,000  as 
its  allotment  for  any  fiscal  year.  These  grants  are  con- 
ditioned upon  the  acceptance  by  the  states  of  the  federal 
law.  There  were  5,610  cases  on  the  register  in  1921,  and 
approximately  $274,000  was  spent  from  federal,  state,  and 
local  funds  and  private  contributions. 

The  rehabilitation  of  disabled  soldiers,  sailors,  and 
marines  is  provided  under  the  Soldier  Rehabilitation  Act 
of  1918.  Between  1918  and  1921  approximately  270,000 
persons  were  declared  eligible  for  training  under  the  pro- 
visions of  this  law,  of  whom  about  234,000  wero  assigned 
to  training.  Administration  of  this  act  has  been  trans- 
ferred from  the  Soldier  Rehabilitation  Division  of  the  Fed- 
eral Hoard  /<  >r  Vocational  Education  to  the  United  States 
Veterans'  Bureau.  The  Federal  Board  for  Vocational 


526        Industrial  Education  and  Training 

Education  is  the  agency  charged  with  the  administration 
of  the  Smith-Hughes  Act  of  1917,  and  the  Civilian  Re- 
habilitation Act  of  1920,  the  organization  and  procedure 
being  similar.  The  federal  board  establishes  connection 
with  state  boards  for  vocational  education  and  city  super- 
intendents of  schools;  it  also  maintains  a  staff  of  experts 
who  cooperate  freely  with  the  educational  authorities  in 
the  various  states.  The  whole  movement  for  vocational 
education  in  this  country  is  promoted  by  the  National 
Society  for  Vocational  Education. 

Training  in  Industry. — Employers  have  been  unable  to 
rely  upon  outside  agencies  for  trained  employees,  and  al- 
though the  remarkable  progress  made  by  the  United 
States  in  furnishing  technical  education  at  public  expense 
will  increase  the  supply  of  trained  workers,  employers 
will  continue  to  find  it  necessary  to  provide  training  facili- 
ties within  their  own  plants.  For  the  great  mass  of  adult 
workers  part-time  instruction  is  inadequate.  On  account 
of  bodily  and  mental  fatigue,  family  obligations,  and 
duties  of  citizenship,  comparatively  few  industrial 
workers  are  able  or  willing  to  attend  continuation  classes 
in  the  evening.  The  consequence  is  that  employers  ex- 
perience a  dearth  of  skilled  workmen  and  are  endeavoring 
to  build  up  a  training  system  of  their  own  that  will  furnish 
an  adequate  supply.  Apprenticeship  schools  and  educa- 
tional courses  are  now  provided  in  the  labor  programs 
of  many  corporations.  Corporations  have  to  meet  the 
necessity  of  training  those  who  are  coming  into  industry 
for  the  first  time,  those  who  are  already  in  the  company's 
service  but  who  must  be  trained  for  more  responsible  po- 
sitions, those  who  are  coming  into  the  plant  from  other 
establishments,  and  immigrant  workers  who  have  had 
little  or  no  opportunity  to  learn  the  English  language 
and  receive  education  in  elementary  branches. 

Generally  speaking,  there  are  three  types  of  instruction 
in  the  educational  plans  adopted  by  modern  corporations ; 
namely,  (1)  job  instruction,  (2)  instruction  in  all  the  ele- 
ments of  a  given  trade,  and  (3)  general  education  in  ele- 
mentary branches  of  learning.  Instruction  for  a  particu- 


Industrial  Education  and  Training        527 

lar  job  is  frequently  given  in  "vestibule  schools,"  in 
which  the  worker  receives  introductory  training  apart 
from  the  workroom  or  else  in  connection  with  the  job.  In 
this  preliminary  training  school  there  is  an  opportunity 
to  observe  and  coach  new  employees.  While  the  vestibule 
school  has  been  used  largely  in  the  intensive  training  of 
workers  for  "repetition  operations,"  it  is  also  applied 
successfully  in  training  specialists  as  operators  of  particu- 
lar types  of  machines.  Here  the  applicant  selected  for  a 
given  position  is  trained  for  a  few  days,  or  at  most  for  a 
few  weeks.  The  benefits  claimed  for  the  vestibule  school 
are  that  it  prepares  the  unskilled  workman  rapidly  for 
better-paid  jobs,  provides  an  opportunity  to  observe  the 
moral  qualities  of  selected  applicants,  and  gives  new 
and  old  employees  a  certain  amount  of  choice  in  their 
work.6  Both  office  and  factory  vestibule  schools  have 
been  introduced  by  many  corporations.  The  course  of  in- 
struction varies  with  the  different  plants,  the  period  gen- 
erally ranging  from  two  to  six  days,  during  which  time 
the  workers  are  paid  a  certain  amount  per  hour.  The  cost 
of  training  each  employee  has  been  estimated  at  $52  for 
a  month's  training,  but  this  outlay  has  been  more  than 
returned  by  increased  efficiency  and  reduction  of  labor 
turnover. 

Apprenticeship  training  is  designed  to  give  the  worker 
complete  mastery  of  a  trade.  Apprenticeship  schools 
have  been  introduced  by  many  corporations,  prominent 
among  which  are  the  Pennsylvania,  Southern  Pacific,  and 
Sante  Fe  Railroad  Companies,  the  General  Electric  and 
Westinghouse  Electric  Companies,  the  International 
Harvester  Company,  and  the  National  City  Bank  of  New 
York.  "Modernized  apprenticeships"  is  the  term  used  to 
differentiate  the  new  system  that  has  sprung  up  within 
the  last  decade  or  so,  from  the  old  system  that  formerly 
prevailed.  Employers  are  beginning  to  understand  that, 
despite  the  short-comings  of  the  trade  union  apprentice- 
ship requirements,  all-around  skilled  workers  were  pro- 
duced. In  the  rush  for  immediate  profits  employers  have 

•Henry  C.  Link,  Employment  Psychology,  pp.  273,  274. 


528        Industrial  Education  and  Training 

been  little  interested  in  prolonged  periods  of  training,  and 
have  embraced  "get-skilled-quick"  systems  until  workers 
skilled  in  every  department  of  a  trade  are  becoming  an 
oddity. 

In  addition  to  specific  job  training  and  general  ap- 
prenticeship for  trade  mastery,  many  corporations  find  it 
necessary,  in  the  interest  of  health,  safety,  efficiency,  and 
loyalty,  to  provide  a  certain  amount  of  general  cultural 
education  for  their  employees.  Adult  immigrant  laborers 
are  the  peculiar  problem  with  regard  to  this  type  of  edu- 
cation. The  inability  of  foreigners  to  understand  English 
has  been  a  prominent  cause  of  inefficiency  and  accident 
frequency.  For  this  reason  many  corporations  provide 
courses  in  English,  civics,  and  naturalization.  In  two 
years  after  introducing  compulsory  classes  in  English  for 
foreigners,  the  Ford  Motor  Company  attributed  a  54  per 
cent  reduction  in  accidents  to  the  fact  that  the  men  could 
read  safety  signs  and  regulations  and  understand  orders 
and  instructions.  The  Joseph  and  Feiss  Company  of 
Cleveland,  and  other  concerns  have  found  that  such  in- 
struction improves  greatly  the  quality  of  workmanship. 
The  instruction  is  sometimes  given  on  company  time  and 
is  often  carried  on  independently  by  the  corporation,  al- 
though in  many  instances  it  cooperates  with  public-school 
authorities  or  such  agencies  as  the  Y.  M.  C.  A.  and  the 
Y.  W.  C.  A.  A  great  many  firms  provide  library  facilities 
for  employees  and  their  families.  Technical  books  and 
magazines  and  a  general  list  of  reading  matter  is  avail- 
able. In  some  plants  a  branch  of  the  public  library  is 
established,  either  in  conjunction  with  the  plant's  own 
library  or  independently,  the  attendants  being  furnished 
by  the  company.  An  agency  of  great  importance  in 
Americanization  and  general  education  work  in  industry. 
is  the  plant  magazine,  usually  issued  monthly,  and  con- 
taining personal  items,  editorials,  articles  on  health  and 
safety,  cartoons,  and  news  of  athletics. 

In  addition  to  training  wage-earners,  many  companies 
have  found  it  necessary  to  provide  special  training  for 
executives  and  foremen.  Intelligent  leadership  is  un- 


Industrial  Education  and  Training        529 

questionably  the  foundation  of  harmonious  industrial  re- 
lations and  efficiency.  Courses  for  executives  include 
such  subjects  as  teamwork,  handling  of  men,  plant  organi- 
zation, machinery  and  materials,  production  records,  and 
general  problems  of  industrial  management.  Emphasis 
is  placed  on  the  coordination  of  the  psychological  with  the 
material  forces  in  production. 

Fundamental  Principles  and  Methods  in  Industrial 
Training. — 1.  Basic  Principles.  Realization  of  efficiency 
in  training  is  not  possible  unless  there  is:  (1)  a  careful 
analytical  survey  of  the  operations  of  the  plant  to  ascer- 
tain the  need  or  advantage  of  any  improvements  which  are 
suggested  for  increasing  output;  (2)  the  formulation  of 
a  definite  program  of  training  either  in  a  separate  train- 
ing department  or  on  the  factory  floor  in  conjunction  with 
production;  (3)  the  selection  of  the  most  inefficient 
workers  for  training;  and  (4)  the  careful  grading  of  em- 
ployees according  to  efficiency  in  production.  In  making 
preliminary  surveys  of  the  plant  the  company  uncovers 
deficiencies  and  extravagances  in  management,  facts  and 
causes  of  labor  turnover,  bad  routings  and  needless  proc- 
esses, and  other  causes  of  waste  and  low  production. 

2.  Methods  of  Training. — One  or  more  of  several 
methods  of  training  may  be  applied.  (1)  The  "pick-up" 
method,  or  dependence  upon  imitation  as  a  means  of 
securing  information  about  industrial  processes,  has  proved 
decidedly  unsatisfactory.  Under  this  scheme  the  worker 
"steals"  or  "picks-up"  the  rudiments  of  the  trade  and 
then  assumes  that  he  is  a  skilled  artizan,  entitled  to  the 
pay  and  prestige  that  go  with  the  trade.  It  is  referred  to 
sometimes  as  the  "bluff  it  and  get  by"  method,  and  is  al- 
ways condemmed  as  economically  wasteful.  (2)  Training 
by  foremen  has  also  been  unsatisfactory.  Foremen  are 
already  overburdened  with  the  duties  of  increasing  pro- 
duction and  maintaining  goodwill,  and  seldom  have  a 
definite  method  of  training  employees.  They  do  not  always 
appreciate  the  value  of  training  and  should  not  be  assigned 
this  important  task.  (3). What  might  be  called  the  "indef- 
inite" method  of  training  consists  in  taking  regular  em- 


530      Industrial   Education   and    Training 

ployees  from  the  production  department  to  break  in  new 
workers.  This  method  has  been  criticized  on  the  ground 
that  old  employees  consider  this  duty  an  interruption  of 
their  own  work  and  an  incidental  matter.  Moreover,  they 
are  inclined  to  emphasize  special  points  to  the  exclusion 
of  general  fundamentals.  (4)  Apprenticeship  has  been 
criticized  on  account  of  its  limited  application,  the  tendency 
to  emphasize  length  of  service,  rather  than  proficiency,  as 
the  measure  of  trade  skill,  and  the  lack  of  a  systematic  and 
efficient  plan  of  instruction.  (5)  Training  on  production 
has  been  advanced  as  the  most  acceptable  method  of  tech' 
nical  instruction  hi  industry,  because  it  is  carried  on  under 
the  direction  of  a  separate  training  department,  the  sole 
purpose  of  which  is  training  on  a  definite,  scientific  plan 
of  instruction.  Under  this  method  the  learner  learns  by 
doing,  and  he  finds  an  interest  in  actually  producing  as  he 
learns.  In  other  words,  training  in  the  plant  provides  an 
atmosphere  of  production  and  establishes  those  real  con- 
ditions that  make  instruction  easy  and  successful.  Its 
greatest  danger  lies  in  subordination  of  instruction  to 
output. 

Organization  and  Operation  of  the  Separate  Training 
Department. — The  separate  training  department  has  been 
found  indispensable.  It  is  operated  as  a  modern  factory, 
and  machinery  and  equipment  is  of  the  best  type,  This 
department  can  be  used  for  the  training  of  new,  unskilled 
help,  unfamiliar  with  the  elementary  branches  of  the  work 
to  which  they  are  assigned;  the  up-grading  of  workers 
already  employed;  the  bringing  up  to  standard  of  those 
workers  who  have  poor  production  records;  the  testing 
out  of  new  applicants  who  claim  to  have  had  experience 
in  the  jobs  for  which  they  have  applied ;  a  laboratory  where 
new  tools  or  methods  of  operation  are  tested  and  studied, 
or  where  whole  processes  are  improved.7  Efficient  con-1 
trol  and  complete  supervision  are  possible  in  the  separate 
training  department  and  this  means  more  skilled  em- 
ployees. Care  is  exercised  to  make  instruction  the  pri» 

•U.  S.  Training  Department,  Bulletin  No.  14,  p.  14. 


Industrial  Education  and  Training        531 

mary  purpose,  and  to  prevent  speed  and  quantity  pro- 
duction from  becoming  paramount. 

Many  systems  of  training  have  failed  because  they  have 
not  been  organized  and  operated  with  due  regard  for  the 
peculiar  conditions  of  particular  establishments.  Success- 
ful plans  are  those  which  are  adapted  to  the  factory ;  have 
definite  methods  of  recruiting  learners,  such  as  establish- 
ing contacts  with  high  schools  and  other  institutions  of 
learning ;  outline  a  systematic  course  of  training ;  provide 
adequate  supervision  and  a  definite  system  of  transfer 
upon  completion  of  training;  and  endeavor  to  follow  the 
trained  workers'  progress  in  the  factory. 

Many  precautions  are  taken  in  establishing  a  depart- 
ment of  training.  Instructors  must  be  well  qualified. 
They  must  be  good  mechanics,  possess  ability  to  impart  to 
others  what  they  know,  understand  the  requirements  of 
various  branches  of  the  trade  and  the  steps  to  be  followed 
in  preparation  for  these  divisions,  have  a  general  educa- 
tion, and  know  how  to  handle  employees.  Records  of 
economy  and  waste  must  be  kept  in  order  to  devise  means 
for  eliminating  unnecessary  wastes.  The  purpose  of 
training  must  be  ascertained,  that  is,  whether  the  aim  is 
to  train  skilled  mechanics,  to  prepare  men  for  specific 
jobs,  or  to  develop  men  for  executive  positions.  Classifica- 
tion and  organization  of  material  and  practical  demon- 
strations are  prerequisite  to  successful  training.  The 
learner's  interest  must  be  aroused  by  pointing  out  the  in- 
terrelations of  the  various  branches  of  the  trade  and  the 
relation  of  the  trade  or  job  to  the  whole  industry.  Finally, 
there  must  be  full  appreciation  of  the  human  factor  in 
production.  The  training  department  is  most  successful 
when  under  the  supervision  of  a  director  who  is  respon- 
sible to  the  chief  executive  for  policies  and  methods  of 
instruction,  and  to  the  superintendent  for  work  routed 
to  the  training  department.  In  selecting  a  director,  cor- 
porations are  careful  to  select  a  man  who  possesses  executive 
ability,  understands  human  nature,  has  an  attractive  per- 
sonality, and  knows  thoroughly  the  fundamental  proc- 
esses  of  manufacturing. 


532        Industrial  Education  and  Training 

Examples  of  Corporation  Schools  and  Apprenticeships. 
1.  Southern  Pacific  Railroad. — This  company's  school  has 
been  operated  as  a  systematic  scheme  for  developing  ex- 
ecutive talent  through  the  medium  of  apprenticeships. 
During  its  many  years  of  experience  the  aim  has  been  to 
give  the  student  an  opportunity  to  pass  through  the  dif- 
ferent departments  of  railroading,  and  actual  work  is  sup- 
plemented with  reading  in  text-books  and  railway  publica- 
tions. The  student  is  first  placed  at  a  station  of  medium 
size  for  a  term  of  six  months,  where  he  performs  duties 
assigned  to  him  by  the  agent.  Because  this  type  of  station 
handles  the  beginning  and  the  end  of  transportation,  he  gets 
experience  of  a  broad  character,  including  ticket  office, 
warehouse,  baggage  room,  yard,  and  the  solicitation  of 
business.  After  completing  this  term  he  is  assigned  con- 
secutively to  Maintenance  of  Way,  the  office  of  the  Superin- 
tendent of  Transportation,  Motive  Power,  Train  Service, 
Accounting  Department,  and  Tariff  Bureau,  spending  three 
months  in  each.  This  enables  him  to  appreciate  the  inter- 
relationship of  the  various  departments. 

Subject  to  the  approval  of  the  management,  the  student 
is  permitted  next  to  choose  specialization  in  either  Opera- 
tion and  Maintenance,  Passenger  and  Freight  Traffic,  or 
Accounting.  He  is  then  given  from  two  to  six  months  of 
training  in  each  division  of  the  department  he  selects,  com- 
pleting forty-two  months'  service  as  a  student.  If  he  goes 
into  Operation  and  Maintenance  he  passes  through  the 
following  divisions:  maintenance  of  way,  motive  power, 
signals,  stores  department,  general  manager's  office,  and 
trainmaster.  In  the  Passenger  and  Freight  Traffic  Depart- 
ment his  time  is  so  distributed  that  he  becomes  in  turn 
report  clerk  at  a  junction  point,  passenger  ticket  agent, 
solicitor  in  a  large  city  office,  and  district  freight  and  pas- 
senger agent.  If  he  goes  into  the  Accounting  Department  he 
becomes  auditor  of  freight  accounts,  auditor  of  passenger 
accounts,  accountant  in  the  division  accounting  bureau, 
auditor  of  disbursements,  and  general  auditor.  The  com- 
pany does  not  claim  to  turn  out  superintendents  and 


Industrial  Education  and  Training        533 

general  managers  overnight  but  seeks  to  make  all-around 
railroad  men  in  a  new  way. 

2.  Apprenticeships  in  Machine  Industries. — A  large 
number  of  corporations  in  machine  industries — the  manu- 
facture of  automobiles,  farm  implements,  cash  registers, 
aeroplanes,  tools,  machines,  and  silk — have  introduced 
systematic  methods  of  training.  The  plans  differ  in  detail 
but  the  general  methods  are  similar.  Students  are  re- 
cruited from  various  sources  through  the  centralized  em- 
ployment department.  Several  training  departments  are 
operated,  including  machine-tool  operation,  tracing  and 
drafting,  electrical  work,  stenographic  and  clerical  work. 
Training  on  machine-tool  work  includes  the  operation 
of  turret  lathes,  milling  machines,  engine  lathes,  screw 
machines,  drill  presses,  bench  work,  and  assembling  of 
materials.  In  addition,  training  is  given  in  blue-print 
reading,  the  use  of  scales,  gauges,  and  other  instruments 
and  equipment.  Simple  mathematics  is  also  offered.  Out 
of  these  groups  inspectors,  foremen,  and  other  executives 
are  selected.  Students  are  chosen  on  the  basis  of  special 
aptitude,  previous  experience,  and  education. 

The  Advantages  of  Vocational  Education. — Graduates 
of  trade  schools,  technical  high  schools,  and  other  institu- 
tions having  courses  in  industrial  training  have  usually 
demonstrated  their  superiority  over  ordinary  workmen 
who  have  been  denied  preparatory  training  for  industry. 
Exceptional  trade  intelligence,  adeptness  for  learning  new 
processes  and  methods,  ability  to  manage  employees,  and 
willingness  to  advance  the  interests  of  the  employer  as 
well  as  their  own  have  been  among  the  characteristics  of 
mechanics  who  have  received  introductory  training.  One 
of  the  most  significant  results  of  vocational  education  is 
that  it  tends  to  divert  the  child  from  blind-alley  jobs  into 
fields  of  interesting  and  reasonably  paid  work.  The  im- 
portance of  this  can  be  appreciated  only  when  one  remem- 
bers the  tragedy  of  the  untrained  child  in  industry.  Place- 
ment bureaus  in  our  great  cities  have  their  registers  filled 
with  the  names  of  boys  about  18  years  of  age  who  had 


534        Industrial  Education  and  Training 

gone  into  the  great  factories  at  14  to  perform  mechanical 
work.  "They  have  reached  the  limit  of  their  income  .  .  . 
They  have  been  doing  treadmill  work.  They  know  noth- 
ing else  but  one  machine.  They  don't  know  what  else  is 
going  on  in  industry.  After  four  years  of  life  in  industry, 
they  are  blind  as  is  the  boy  of  14  as  to  the  opportunities 
there  are  for  them.  They  are  great  tragedies."8 

When  properly  correlated  with  the  needs  of  industry, 
vocational  education  does  much  to  rescue  these  youths 
from  the  dead  level  of  the  unskilled,  and  to  increase 
national  efficiency.  A  more  ultimate  advantage  of  voca- 
tional education  is  found  in  its  preparation  of  the  workers 
for  the  assumption  of  those  larger  responsibilities  which 
must  come  with  the  democratization  of  industry.  Workers 
recognize  too  frequently  the  advantages  of  industrial 
management  without  understanding  its  difficulties.  If 
they  are  to  demand  a  voice  in  the  control  of  industry,  they 
must  become  familar  with  the  technique  of  production 
and  management. 

Conclusions. — Education  is  essentially  a  public  function 
and  the  present  tendency  in  the  United  States  to  take 
general  trade  training  out  of  private  hands  is  a  desirable 
one.  It  is  not  the  business  of  the  employer,  moreover, 
to  furnish  elementary  education  and  courses  in  citizenship. 
Private  trade  schools  are  operated  in  the  interests  of  cor- 
porations, and  may  be  prejudicial  to  the  best  interests 
of  the  workers  and  the  nation.  Many  of  these  schools 
are  introduced  to  destroy  trade  union  requirements  rather 
than  to  give  complete  trade  training.  Employers  are 
too  often  interested  in  narrow  specialization. 

Employees  do  not  appear  to  take  advantage  of  training 
facilities  furnished  by  employers.  For  instance,  in  72 
establishments  which  employed  about  265,000  persons  and 
provided  training  facilities,  only  14,200,  or  about  5  per 
cent  of  the  total,  were  enrolled  as  students.9  Many  of 
these  courses  are  given  at  night  when  the  workers  are 

8  Testimony  of  Helen  W.  Rogers,  Director  of  the  Boston  Placement 
Bureau,  before  the  U.  S.  Commission  on  Industrial  Relations. 
•  U,  S.  Bureau  of  Labor  Statistics,  Bulletin  No.  250,  p.  96. 


Industrial  Education  and  Training        535 

too  tired  physically  to  submit  to  mental  discipline.  Em- 
ployers will  probably  always  find  it  necessary  to  provide 
training  for  specific  jobs,  since  no  school  system  can  equip 
men  for  the  peculiar  needs  of  every  establishment.  The 
greatest  promise,  however,  lies  in  a  comprehensive  system 
of  continuation  schools  which  coordinates  the  theoretical 
with  the  practical,  &nd  makes  training  posssible  within  the 
working  hours  of  each  day.  General  social  interests  will 
be  served  best  if  vocational  education  is  controlled  jointly 
by  employers,  employees,  and  the  community.  Free  text- 
books and  equipment  should  be  furnished  and  the  work 
so  planned  as  to  care  for  the  needs  of  an  enlightened 
citizenship  and  the  problems  of  industry. 


SELECTED  REFERENCES 

ALEXANDER,  M.  W.,  Apprenticeship  in  the  Metal  Trades,  Com- 
mons, J.  R.  (editor),  Trade  Unionism  and  Labor  Problems, 

revised  edition,  1921,  pp.  233-248. 
BAKNETT,  G.   E.,   Trade  Agreements  and  Industrial  Education, 

National  Society  for  the  Promotion  of  Industrial  Education, 

Bulletin  22,  1916. 
BEATTY,  A.  J.,  A   Comparative  Study  of  Corporation  Schools, 

1918. 

BOLEN,  G.  L.,  Getting  a  Living,  1903,  Chap.  II. 
CABLTON,  F.  T.,  Education  and  Industrial  Evolution,  1908,  Chaps. 

X-XII  and  XV. 
CARLTON,  F.  T.,  The  History  and  Problems  of  Organized  Labor, 

revised  edition,  1920,  Chap.  XVIII. 
COMMONS,  J/R.,  Industrial  Goodwill,  1919,  pp.  126-142. 
DEWEY,  JOHN,  Democracy  and  Education,  1916. 
GILLETTE,   J.   M.,   The   Vocational  Concept,  Amer.   Sociological 

Society  Pubs.,  13:70-80,  1918. 
GILLETTE,  J.  M.,  Vocational  Education,  1910. 
GOLDOTONE,    F.    W.,    Labor    and    Continued    Education,    Labor 

and  Industry,  University  of  Manchester,  1920,  pp.  131-146. 
HILL,  H.  C.,  Americanization  Movement,  American  Journal  of 

Sociology,  24:609-642,  May,  1919. 
MORRIS,  J.  VAN  LIEW,  Employee  Training :  A  Study  of  Education 

and  Training  Departments  in  Various  Corporations,  1921. 
NATIONAL  FOUNDERS'  ASSOCIATION  AND  NATIONAL  METAL  TRADES 
,  Open  Shop  Review,  Sept.,  1918,  pp.  374-377; 


536        Industrial  Education  and  Training 

June,  1919,  pp.  213-222;  July,  1919,  pp.  261-266;  July,  1921, 
pp.  255-265. 

NATIONAL  SOCIETY  TOR  VOCATIONAL  EDUCATION,  Bulletin  30,  1919. 

UNITED  STATES  BUREAU  OP  LABOR,  Trade  and  Technical  Educa- 
tion, Annual  Report  of  the  Commissioner  of  Labor,  1902. 

UNITED  STATES  COMMISSION  ON  INDUSTRIAL  RELATIONS,  Final 
Report,  1916,  pp.  255-261. 

UNITED  STATES  TRAINING  SERVICE,  Training  in  Industrial  Plants, 
1919. 

WRIGHT,  C.  D.,  The  Apprenticeship  System  in  Relation  to  Indus- 
trial Education,  U.  S.  Bureau  of  Education,  Bulletin  389, 
1908. 

WRIGHT,  C.  D.,  Outline  of  Practical  Sociology,  fifth  edition,  1902, 
pp.  192-205. 


CHAPTER  XXIII 

COOPERATION1 

Importance  of  Cooperation  in  Relation  to  Labor  Prob- 
lems.— For  several  reasons,  cooperation  deserves  con- 
sideration as  a  proposed  solution  of  the  problems  of  labor. 
(1)  Cooperative  movements  indicate  the  practical  possi- 
bilities of  the  fundamental  principle  upon  which  all  con- 
structive reform  schemes  are  based;  namely,  mutual  in- 
terest; (2)  they  reveal  the  persistence  and  determination 
of  the  wage-earning  classes  to  improve  their  economic 
status  by  controlling  the  agencies  of  production  and  dis- 
tribution; (3)  they  demonstrate  the  wisdom  and  sanity 
of  peaceful,  deliberate,  and  constructive  action  in  the  solu- 
tion of  the  serious  economic  problems  of  modern  civiliza- 
tion; and  (4)  they  show  that  with  the  right  type  of 
leadership  industrial  workers  can  organize  and  operate 
business  enterprises  successfully. 

The  Nature  and  Forms  of  Cooperation. — Cooperation 
may  be  defined  as  an  organized,  usually  nonpolitical  at- 
tempt on  the  part  of  an  association  of  persons  to  control 
the  production  and  distribution  of  commodities  for  the 
satisfaction  of  their  numerous  wants.  In  the  past,  the 
cooperative  movement  has  been  almost  exclusively  indus- 
trial, but  in  recent  years  it  has  begun  to  assume  a  political 
significance,  especially  in  Europe.  Mutual  benefit,  rather 
than  profit,  is  the  main  purpose  of  cooperation.  Co- 
operators  recognize  the  importance  of  capital  in  the 
economic  organization  of  society,  but  they  sock  to  secure 
for  the  workers  the  advantages  that  now  accrue  to  the 
private  enterpriser.  The  immediate  aim  of  cooperation 

1 A  considerable  portion  of  this  chapter  is  drawn  from  the  writer  '• 
monograph:  Cooperation — A  Study  in  Constructive  Economic  Reform, 
published  by  the  University  of  Illinois,  1921, 

637 


538  Cooperation 

is  the  elimination  of  the  middleman,  employer,  and  private 
capitalist,  and  the  substitution  therefor  of  collective 
ownership  and  control  by  associated  cooperators.  The  ulti- 
mate purpose  of  cooperation  is  the  development  of  a 
cooperative  commonwealth  organized  and  functioning  in 
the  interest  of  the  community  of  producers  and  consumers. 
The  latter  aim  is  revolutionary,  since  the  economic  system 
is  to  be  reconstructed,  but  the  method  of  attaining  this 
end  is  evolutionary  and  peaceful. 

There  are  four  main  forms  of  cooperation:  (1)  con- 
sumers' cooperation,  or  the  sale  of  commodities  by  an  asso- 
ciation of  persons  who  desire  to  eliminate  the  merchant 
middleman  and  his  profits,  in  the  interest  of  those  who 
patronize  the  business;  (2)  producers'  cooperation,  which 
is  effected  by  associations  of  workers  who  dispense  with  the 
services  of  the  employer  and  appropriate  for  themselves 
the  profits  that  would  otherwise  go  to  him;  (3)  cooperative 
credit,  which  consists  in  the  associative  effort  of  those  who 
seek  to  obtain  the  advantages  of  collective  capital  and 
credit  by  eliminating  the  profits  of  private  financiers,  and 
(4)  distributors'  cooperation,  comprising  organizations  of 
agriculturists  who  market  their  own  products,  and  thus 
dispense  with  the  private  elevator,  commission  house,  and 
"grain  and  produce  trust." 

I.  Consumers'  Cooperation 

Distinguishing  Characteristics  of  Consumers'  Societies. 

—Cooperative  associations  of  consumers  have  several  well- 
defined  features. 

1.  Organization  and  Membership.-^ Membership  is  open 
to  all  who  meet  certain  requirements  of  moral  character. 
In  no  sense  are  these  societies  closed  corporations. 

2.  The  Purchase  of  Shares. — Shares  are  usually  of  small 
denomination  and  issued  at  par  value.    In  the  United  King- 
dom the  value  of  a  share  is  commonly  £1   ($5),  and  this 
denomination  is  common  in  the  United  States,  although 
here  $10  and  $20  shares  are  frequently  issued  or  members 
are  required  to  purchase  ten  $5  shares.     Shares  are  so 


Cooperation  539 

small  as  to  come  within  reach  of  the  lowest  paid  wage- 
earner,  and  provision  is  made  for  payment  on  the  install- 
ment plan,  or  even  by  automatic  accumulation  of  dividends. 
This  plan  renders  cash  payments  unnecessary  except  for  a 
small  initial  amount  on  allotment  of  shares.  The  steady 
growth  of  the  cooperative  movement  is  attributable  in  a 
large  measure  to  this  unusually  convenient  method  of  stock 
purchasing. 

3.  Method  of  Surrendering  Shares, — Sometimes  societies 
require  each  member  to  hold  at  least  one  transferable  share, 
which  can  be  disposed  of  only  by  sale  to  someone  else.    The 
advantage  of  this  requirement,  especially  in  the  case  of  the 
small,  struggling  society,  lies  in  the  fact  that  it  helps  to 
sustain  the  membership  and  to  perpetuate  the  society. 

4.  Democratic     Control    and    Administration. — In    all 
true  cooperative  associations  the  principle  of  one-man-one- 
vote  is  applied,  irrespective  of  the  number   of  shares  held. 
Rigid  adherence  to  this  principle  has  been  instrumental 
in  precluding  that  concentration  of  stock  ownership  and 
control  which  so  frequently  results  in  disaster  for  the  joint- 
stock  company.    In  cooperative  societies,  moreover,  voting 
by  proxy  is  generally  prohibited. 

5.  The  Rate  of  Return. — The  return  on  share  capital  is 
limited  to  about  4  or  5  per  cent  per  annum.    Profits  that 
remain  after  the  payment  of  this  interest  are  distributed 
in  certain  agreed   proportions.     The  surplus  is  divided 
among  the  customers,  members  and  nonmembers,  as  divi- 
dend on  purchases,  although  employees  are  sometimes  in- 
cluded.   In  addition  to  share  capital,  there  is  "loan  capital" 
or  advances  to  the  society  by  members  for  the  purpose  of 
enlarging  the  business,  and  upon  which  a  definite  rate  of 
return  is  made. 

6.  Publicity    of   Accounts   and   Statements. — Much    of 
the  confidence  in  the  cooperative  movement  has  grown  out 
of  the  practice  of  publishing  at  frequent  intervals  all  of 
the  accounts  of  the  organizations.     Financial  statements 
are  usually  detailed  and  complete,  and  there  obtains  none 
of  the  secrecy  that  has  brought  into  disrepute  so  many 
private  competitive  enterprise* 


540  Cooperation 

7.  Trading. — The   privilege   of  trading  at   cooperative 
stores  is  not  confined  to  members,  although  the  volume  of 
sales  to  nonmembers  is  not  very  large.    This  may  be  attrib- 
uted to  the  ease  with  which  membership  may  be  secured  and 
to  the  fact  that  members  are  given  a  rate  of  dividend  on 
purchases  which  is  double  that  received  by  nonmembers. 

8.  Prices. — The  cooperative  society  that  follows  strictly 
the  Rochdale  plan  seldom  attempts  to  cut  prices,  and  does 
not  make  a  practice  of  offering  inducements  in  the  form 
of  "specials."    Generally,  only  the  best  brands  of  standard 
goods  are  handled.    The  member  receives  his  profit  or  sav- 
ing in  the  form  of  quarterly  dividends,  rather  than  in  his 
market  basket.     Some  American  societies,  as  the  Central 
States  Cooperative  Society,  have  adopted  a  definite  policy 
of  cutting  prices. 

9.  Business  on  a  Cash  Basis. — Cooperative  societies  en- 
deavor to  do  a  strictly  cash  business,  but  there  is  frequent 
departure   from   this    principle.     Many    societies    in   the 
United  States  grant  credit  up  to  a  certain  percentage,  one- 
third  or  one-half  of  contributed  share  capital  or  the  total 
holdings  of  loan  capital,  when  it  becomes  necessary  to  do  so 
to  hold  membership. 

10.  Legal  Sanction. — In  countries  where  the  value  of  co- 
operative societies  is  fully  recognized,  special  provisions' 
have  been  made  for  their  incorporation.     In  the  United 
Kingdom  such  societies  are  incorporated  under  the  Friendly 
Societies  Acts,  1896-1908,  and  the  Industrial  and  Provident 
Societies  Act  of  1893,  under  which  no  one  can  hold  more 
than  £200  in  shares.    In  the  United  States  special  legal  pro- 
visions are  made  for  nonprofit-seeking  corporations  and  as- 
sociations ;  several  states  have  in  this  way  encouraged  and 
protected  such  organizations.    Under  a  federal  law  (Acts  of 
1921-1922,  Public  No.  146,  67th  Cong.)  approved  February 
18,  1922,  persons  engaged  in  the  production  of  agricultural 
commodities  may  organize  associations  for  the  processing 
and  marketing  of  their  products  in  interstate  or  foreign 
commerce.    These  must  be  mutual  benefit  associations,  op- 
erating on  the  principles  of  one-man-one-vote,  regardless  of 
the  amount  of  stock  held,  and  interest  on  share  capital  not 


Cooperation  541 

to  exceed  8  per  cent  per  annum.  The  business  done  for  non- 
members  must  not  exceed  that  done  for  members,  and  there 
must  be  no  monopoly  or  restraint  of  trade. 

Historical  Sketch  of  the  Cooperative  Movement  in  the 
United  Kingdom. — 1.  The  Period  of  Germination,  1825- 
1844. — The  genesis  of  cooperation  in  the  British  Isles  is 
generally  associated  with  the  name  of  Robert  Owen  (1770- 
1857),  prominent  employer  and  social  reformer.  The  evils 
resulting  from  the  Industrial  Revolution  led  Owen  to  pro- 
pose the  establishment  of  a  voluntary  cooperative  indus- 
trial commonwealth.  In  this  early  period  the  cooperative 
movement  consisted  chiefly  of  a  series  of  productive 
colonies.  Almost  contemporaneously  with  these  Utopian 
experiments,  however,  a  movement  was  initiated  for  the 
organization  of  cooperative  workshops  and  stores.  This 
movement  attained  considerable  success,  about  266  socie- 
ties being  established  prior  to  1830.  Cooperation  assumed 
something  of  a  national  character  when,  in  1834,  Robert 
Owen  organized  the  Grand  National  Consolidated  Trade 
Unions  for  the  purpose  of  raising  wages,  shortening  the 
work-day,  and  establishing  cooperative  enterprises.  Legal 
opposition  and  an  organized  lockout  crushed  this  move- 
ment. Lack  of  a  solid  financial  foundation  and  proper 
business  methods  caused  the  cooperative  stores  and  work- 
shops to  succumb  to  the  pressure  of  competition.  The 
productive  colonies  were  similarly  ill-fated. 

2.  The  Period  of  Reorganization,  1844-1864. — The  ideal 
of  cooperation  was  destined  soon  to  be  given  more  definite 
and  practical  expression  by  the  "Rochdale  pioneers." 
The  beginning  of  the  famous  Rochdale  plan  was  very 
modest.  In  1844  twenty-eight  poor  flannel  weavers,  just 
emerging  from  an  unsuccessful  strike,  subscribed  to  a 
fund  to  be  used  in  the  purchase  of  flour,  sugar,  and  other 
articles,  which  were  sold  to  the  subscribers  at  prevailing 
market  prices,  the  profits  realized  on  sales  being  dis- 
tributed periodically  among  the  members.  The  first  shares 
were  purchased  by  an  insignificant  fund  accumulated  at 
the  rate  of  two  pence  a  week.  By  permitting  the  dividend 
to  accumulate  until  it  reached  £5  (about  $25)  per  man, 


Cooperation 

a  total  of  £140  was  secured,  which  provided  sufficient 
captial  to  rent  a  dilapidated  old  store  building  in  a  back 
street  known  as  Toad  Lane,  in  Rochdale,  near  Manchester. 
The  first  week's  sales  amounted  to  about  $10.  The  success 
of  the  Rochdale  experiment  may  be  attributed  to  the 
abandonment  of  credit  accounts,  sound  management  and 
scrupulous  attention  to  balance  sheets,  apportionment  of 
surplus  earnings  in  proportion  to  purchases,  and  provision 
of  an  educational  fund  designed  to  develop  in  the  mem- 
bers the  spirit  and  ideals  of  true  cooperation.  The  growth 
of  cooperation  in  this  period  exceeded  all  expectations. 
In  1864  the  total  cooperative  trade  was  approximately 
$14,000,000.  The  practical  business  sense  of  the  founders, 
the  removal  of  legal  restrictions  on  investment,  and  the 
provision  of  legal  protection  for  the  funds  of  the  societies 
were  among  the  factors  contributing  to  this  success. 

3.  The  Period  of  Integration,  1864-1884.— The  year  1864 
marks  the  genesis  of  a  period  of  integration.  Within 
six  years  the  principal  institutions  of  the  cooperative 
movement  in  the  United  Kingdom  were  founded.  In  1864 
the  English  Cooperative  Wholesale  began  its  auspicious 
career,  in  1869  the  Scottish  Wholesale  Society  began 
operations,  and  in  1871  the  Cooperative  News  made  its' 
first  appearance.  The 'Women's  Guild  was  organized  in 
1883,  followed  by  the  establishment  of  the  Productive 
Federation.  In  1864  there  were  394  societies  reporting 
a  membership  of  129,429,  sales  amounting  to  about  $14,- 
000,000,  a  net  surplus  of  over  $1,000,000,  and  combined 
share  and  loan  capital  aggregating  almost  $4,000,000. 
Twenty  years  later  (1884)  1,291  societies  reported  a  total 
membership  of  729,957,  sales  amounting  to  over  $152,000,- 
000,  a  net  surplus  of  over  $12,000,000,  and  a  combined 
share  and  loan  capital  of  $47,000,000.  The  remarkable 
development  was  promoted  by  the  Cooperative  Union 
and  the  Cooperative  Congress  established  in  1869.  The 
Cooperative  Union,  a  federation  of  cooperative  societies 
in  the  United  Kingdom,  gives  legal  advice,  spreads  propa- 
ganda, stimulates  education  in  cooperative  enterprise,  and 
protects  the  general  interests  of  the  entire  movement.  The 


Cooperation  543 

Cooperative  Congress  is  held  annually  under  the  direction 
and  auspices  of  the  union. 

4.  The  Period  of  Expansion,  1884-1914. — The  period  of 
thirty  years  following  1884  was  characterized  not  only 
by  unprecedented  growth  in  the  fields  of  cooperative  pro- 
duction and  distribution,  but  also  by  the  internationaliza- 
tion of  cooperation,  through  the  organization,  in  1885, 
of  the  International  Cooperative  Alliance,  and  the  develop- 
ment of  agricultural  cooperation,  indicated  by  the  es- 
tablishment of  the  Irish  Agricultural  Wholesale  Society 
in  1898,  and  the  Agricultural  Association  for  England  and 
Wales  in  1904.    The  movement  was  aided  materially  by 
the  English  Women's  Cooperative  Guild  (1883),  the  Scot- 
tish Women's  Cooperative  Guild   (1892),  and  the  Irish 
Women's  Cooperative  Guild  (1907).    The  strength  of  the 
movement  in  this  period  is  indicated  by  the  fact  that  the 
collective  trade  in  1914  exceeded  $735,000,000,  as  com- 
pared with  $152,000,000  in  1884,  an  increase  of  about  383 
per  cent. 

5.  The  Period  of  Supergrowih,  1914  to  the  Present. — 
The  growth  of  the  movement  in  this  period  has  been 
phenomenal.    At  the  end  of  1920,  the  societies  affiliated 
with  the  Cooperative  Union  embraced  4,600,000  members, 
representing  with  their  families,  approximately  one-half 
01  the  population  of  the  United  Kingdom.     Share  and 
loan  capital  amounted  to  about  $550,000,000,  the  total 
trade  turnover  to  more  than  $2,000,000,000,  and  the  net 
surplus  to  approximately  $130,000,000.    Over  200,000  per- 
sons were  employed,  and  something  like  $150,000,000  was 
paid  in  wages  and  salaries.    Between  1913  and  1920  mem- 
bership increased  51   per  cent;  share  and  loan  capital, 
108  per  cent;  sales,  211  per  cent;  net  surplus,  89  per  cent; 
employees,  40  per  cent;  and  the  wages  and  salaries  bill, 
249  per  cent.    The  number  of  distributive  retail  societies 
La  1920  was  1,379,  and  the  total  number  of  all  societies 
ajffiliated  with  the  union.  1.501. 

6.  TKe  Cooperative  Wholesales. — Fully  96  per  cent  of 
the  retail  distributive  societies  are  members  of  the  co- 
operative  wholesales.      Ever    since    its   establishment    at 


544  Cooperation 

Manchester,  in  1864,  the  English  Cooperative  "Wholesale 
has  experienced  great  prosperity.  Branches  were  soon 
opened  in  London  and  Liverpool,  and  later  in  Ireland, 
France,  Germany,  Denmark,  and  the  United  States.  Pro- 
ductive and  distributive  departments  expanded  rapidly, 
and  by  1914  their  activities  had  extended  to  numerous 
countries,  including  Ceylon,  Southern  India,  and  the  West 
Coast  of  Africa.  The  Scottish  Cooperative  Wholesale  and 
the  Irish  Agricultural  Wholesale  have  also  been  pros- 
perous. The  three  cooperative  wholesales  had,  in  1920, 
a  collective  society  membership  of  2,119,  a  share  and  loan 
capital  of  about  $120,000,000,  and  collective  sales  of  $680,- 
000,000.  The  net  surplus  amounted  to  about  $4,500,000, 
the  number  of  employees  to  47,470,  and  total  wages  and 
salaries  to  about  $37,000,000.  The  English  and  Scottish 
wholesales  own  and  operate  successfully  factories  and 
establishments  for  the  production  of  clothing,  cabinets, 
brushes,  tobacco,  preserves,  groceries,  biscuits,  flour  and 
meal,  soap,  paints  and  varnishes,  et  cetera.  Iron  works, 
tin  plate  mills,  coal  mines,  woolen  mills,  weaving  sheds, 
tanneries,  creameries,  tea  plantations,  banking  houses,  and 
a  merchant  fleet  are  among  the  enterprises  of  the  societies. 

The  Cooperative  Movement  in  the  United  States. — The 
cooperative  movement  in  the  United  States  has  had  a  very 
checkered  career ;  it  has  been  characterized  by  remarkable 
outbursts  of  enthusiasm,  followed  by  dismal  failure  and 
decay.  But  the  ideals  and  spirit  of  cooperation  have  at 
no  time  vanished  completely.  At  frequent  intervals  large 
bodies  of  farmers  and  industrial  wage-earners  have  em- 
braced the  practical  idealism  of  cooperation. 

1.  The  Genesis  of  the  Movement,  1794-1861. — The  incep- 
tion of  the  cooperative  movement  in  the  United  States 
dates  back  to  a  time  preceding  Robert  Owen  in  England. 
In  1794  a  journeymen  cordwainers'  union  of  Baltimore 
established  a  cooperative  boot  and  shoe  factory  for  the 
purpose  of  providing  employment  to  its  members.  A 
second  attempt  was  made  by  this  same  trade  in  1806, 
after  trial  for  conspiracy.  Periods  of  industrial  depres- 
sion and  excessive  prices  of  commodities  continued  to 


Cooperation  545 

force  the  attention  of  wage-earners  to  possible  relief 
through  cooperative  effort.  Cooperative  stores  were 
opened  but  many  failed  because  they  sold  goods  at  less 
than  prevailing  market  prices.  The  real  spirit  and  the 
true  policies  of  cooperation  were  lacking  in  the  early  experi- 
ments, so  they  were  doomed  to  failure. 

Apart  from  numerous  communistic  societies,  probably 
the  first  example  of  real  consumers'  cooperation  in  the 
United  States  was  the  "buying  club"  or  "division  store" 
organized  by  a  tailor  in  the  city  of  Boston  in  1844.  Out 
of  this  attempt,  which  was  made  among  the  members 
of  the  New  England  Association  of  Mechanics  and  Work- 
ingmen,  there  developed  in  1847  the  Workingmen's  Pro- 
tective Union,  the  growth  of  which  is  indicated  by  the 
fact  that  in  1852,  403  branches  and  subdivisions  of  the 
union  had  been  established,  and  165  of  these  reported 
sales  for  the  preceding  year  amounting  to  $1,696,825.46. - 
As  a  result  of  a  schism  in  this  movement,  the  American 
Protective  Union  was  organized  in  1853.  By  1857  this 
organization  was  conducting  business  in  ten  states  and 
reported  the  operation  of  350  divisions,  $291,000  capital, 
and  an  annual  trade  amounting  to  $2,000,000.  In  1856 
the  original  New  England  Protective  Union  reported  63 
divisions,  3,584  members,  $130,912  capital,  and  a  trade 
volume  for  1885  totaling  $1,005,882.02.3  Both  of  these  asso- 
ciations succumbed  with  the  outbreak  of  the  Civil  War, 
failure  being  attributed  to  the  practice  of  selling  com- 
modities at  cost,  incompetent  management,  extension  of 
credit,  lack  of  intelligence,  and  the  absence  of  a  true 
cooperative  spirit. 

In  1853  the  International  Industrial  Assembly  of  Amer- 
ica, having  a  membership  of  200,000,  promoted  coopera- 
tion, and  in  1866  the  National  Labor  Union  adopted  the 
same  policy,  urging  the  establishing  of  cooperative  stores 
and  workshops  in  every  kind  of  business  in  all  sections 
of  the  country,  but  little  was  actually  accomplished  by 
these  organizations.  Their  influence  was  constructive 

1  Adams  and  Simmer,  Labor  Problem*,  p.  398. 

•£.  W.  Bemis,  Ilittory  of  Cooperation  in  the  United  States,  p.  23. 


546  Cooperation 

chiefly  in  demanding  legislation  designed  to  aid  coopera- 
tive societies.  The  stores  existing  in  this  period  were 
mere  purchasing  agencies. 

2.  The  Period  of  Further  Experimentation,  1866-1914. — 
Immediately  following  the  Civil  War  the  Patrons  of  In- 
dustry, a  farmers'  association,  was  organized  and  es- 
tablished a  number  of  cooperative  stores.  The  early 
career  of  this  movement  was  auspicious,  but  soon  it  de- 
clined and  many  of  its  stores  lost  their  cooperative  fea- 
tures. Remnants  of  this  grange  movement  survived,  there 
being  a  wholesale  society  and  150  retail  stores  in  Texas, 
in  1885.  In  1894-1895  the  wholesale  reported  sales 
amounting  to  $65,000,  and  a  commission  business  of  $222,- 
661.91.  By  1896  the  movement  had  suffered  further  de- 
cline and  little  or  nothing  of  it  remains  to-day.  The 
Knights  of  Labor  (organized  in  1869)  established  pro- 
ductive and  cooperative  societies  on  a  large  scale,  but 
lack  of  a  cooperative  ideal  and  vision  soon  caused  stores 
to  degenerate  into  mere  commission  houses,  and  the  move- 
ment assumed  an  aggressive  labor  policy,  using  the  strike 
and  securing  legislation  to  achieve  the  aims  of  the 
workers. 

The  cause  of  cooperation  was  given  great  impetus  by 
the  Sovereigns  of  Industry,  a  cooperative  association  or- 
ganized in  1874.  Stores  were  established  throughout  the 
North  Atlantic  states,  and  in  1875  the  association  reported 
101  councils  with  6,670  members  engaged  in  distributive 
cooperation.  Fully  one-half  of  the  stores  started  by  this 
organization  were  operated  on  the  Rochdale  plan,  and 
this  fact  has  earned  for  the  Sovereigns  of  Industry  the 
distinction  of  being  the  first  to  establish  that  system  on 
the  American  continent.  Poor  methods  of  administration 
and  unsound  business  policies  forced  the  dissolution  of 
the  association  in  1879,  although  some  of  its  stores  con- 
tinued as  independent  enterprises,  and  many  that  sus- 
pended operation  were  not  compelled  to  do  so  for  financial 
reasons.4 

An  innovation  in  cooperative  experiments  in  America 

4  Adams  and  Sumner,  op.  tit.,  p.  400. 


Cooperation  547 

was  made  In  the  organization  of  the  Labor  Exchange  at 
Independence,  Missouri,  in  1889.  Members  of  the  associa- 
tion were  privileged  to  bring  to  the  exchange  any  com- 
modity they  desired,  and  receive  payment  in  the  form 
of  a  labor  check  for  an  equivalent  value  in  the  local 
wholesale  market,  where  goods  could  be  purchased  at 
retail  prices.  Nonmembers  could  trade  at  the  exchange 
either  by  the  use  of  labor  checks  or  legal  money.  The 
movement  had  135  branch  exchanges  spread  throughout 
32  states,  with  a  membership  of  6,000  in  1896.  Following 
the  death  of  its  founder — Mr.  G.  B.  DeBernardi — the  ex- 
periment soon  declined. 

Numerous  other  organizations,  such  as  the  Farmers' 
Alliance,  were  active  in  promoting  cooperative  experi- 
ments. Movements  of  a  more  or  less  sporadic  nature 
developed  in  New  England,  the  Middle  West,  the  West, 
and  in  the  Pacific  Coast  region. .  In  the  Central  West  and 
Northwest  the  movement  was  aided  very  materially  by 
the  Right  Relationship  League,  organized  in  Chicago  in 
1898.  In  1905,  Professor  Ira  B.  Cross  found  343  co- 
operative stores  operating  in  the  United  States,  repre- 
senting an  estimated  capitalization  of  almost  $9,000,000, 
a  membership  of  over  76,000,  and  a  trade  of  about  $265,- 
000,000.  Growth  was  slow  between  1905  and  1914. 

3.  Tlie  Period  of  Revival  and  Unification,  1914  to  the 
Present. — Recent  developments  in  the  American  coopera- 
tive movement  give  promise  of  permanent  success.  There 
are  now  well-defined  geographic  centers  of  cooperative 
effort,  including  Seattle  and  San  Francisco,  on  the  Pacific 
Coast ;  Minneapolis  and  St.  Paul,  in  the  Northwest ; 
Chicago,  in  the  Central  West;  and  New  York  City,  in 
the  East.  Clustering  around  these  centers  of  the  move- 
ment are  about  3,000  or  4,000  cooperative  retail  societies 
operated  by  consumers,  with  a  total  membership  of  over 
500,000,  representing,  with  their  families,  about  2,000,000 
persons  and  a  combined  purchasing  power  of  $200,000,- 
000.  The  Cooperative  League  of  America  estimates  that 
the  total  capital  of  those  societies  is  $15,000,000.  Prac- 
tically every  phase  of  cooperative  effort  is  represented 


548  Cooperation 

in  the  present  movement  in  the  United  States,  and  unpre- 
cedented success  has  been  achieved.  Illinois  alone  had 
about  100  consumers'  cooperative  societies  in  1920,  with 
a  combined  business  of  something  like  $10,000,000.  Na- 
tional and  racial  groups  in  America  which  are  conducting 
successful  cooperative  societies,  include  the  English, 
Scotch,  Hebrews,  Russians,  Italians,  Germans,  Poles, 
Slovaks,  Franco-Belgians,  and  Finns.  Indeed,  the  success 
of  cooperation  in  America  in  recent  years  has  resulted 
in  no  small  measure  from  the  efforts  of  the  foreigners 
who  learned  cooperative  methods  and  ideals  in  the  lands 
from  which  they  came. 

Cooperative  wholesale  societies  are  organized:  (1)  to 
enable  the  consumers'  societies  to  make  their  purchases 
in  an  advantageous  manner  by  avoiding  competition 
among  themselves  in  the  open  market;  (2)  to  defend  co- 
operative retail  societies  from  the  opposition  of  private 
merchants  who  bring  pressure  upon  privately  owned 
wholesales  to  prevent  the  sale  of  goods  to  cooperative 
stores;  (3)  to  eliminate  the  profits  of  the  commission 
house,  jobber,  and  wholesaler ;  (4)  to  secure  the  economy 
and  efficiency  of  large-scale  buying.  Prominent  among 
the  cooperative  wholesales  that  have  been  organized  in 
the  United  States  in  recent  years  are  the  National  Co- 
operative Wholesale  with  headquarters  at  Chicago;  the 
Pacific  Cooperative  League  of  San  Francisco;  the  Co- 
operative Wholesale  Society  of  America  with  central 
offices  at  St.  Paul;  the  Cooperative  Central  Exchange 
of  Superior,  Wisconsin;  the  Tri-State  Cooperative  Asso- 
ciation which  operates  in  Ohio,  Pennsylvania,  and  West 
Virginia;  and  the  Central  States  Cooperative  Wholesale 
Society  of  East  St.  Louis,  Illinois. 

Cooperative  wholesales  in  the  United  States  are  con- 
ducted along  the  following  lines.  (1)  Membership  consists 
of  cooperative  societies  and  clubs  having  the  Rochdale 
ideal  and,  sometimes,  of  individuals.  Associations  operated 
for  profit  are  generally  excluded.  (2)  Affiliating  societies 
are  required  to  invest  from  $100  to  $1,000  in  the  capital 
stock  of  the  wholesale,  according  to  the  size  of  the  local 


Cooperation  549 

retail  association.  (3)  Administration  of  the  wholesales 
is  entrusted  to  a  board  of  seven  or  nine  directors  elected 
from  the  membership  of  the  affiliated  societies.  (4) 
Generally,  all  goods  are  sold  for  cash  at  current  wholesale 
prices,  and  savings  are  returned  to  the  constituent  societies 
in  the  form  of  a  dividend  distributed  in  proportion  to 
patronage.  Sometimes,  as  in  the  case  of  the  Central  States 
Wholesale,  short-time  credit  is  extended,  and  the  policy 
of  selling  as  near  to  cost  as  possible  is  adopted  for  the 
purpose  of  meeting,  if  not  destroying,  local  retail  com- 
petition. 

British  cooperative  wholesales  are  federations  of  inde- 
pendent distributive  retail  societies,  while  many  American 
cooperative  wholesales  have  a  tendency  toward  centraliza- 
tion, conducting  both  wholesale  and  retail  activities,  with 
final  control  of  retail  branches  remaining  largely,  if  not 
completely,  in  the  hands  of  the  wholesale.  It  cannot  be 
determined  yet  whether  the  "American  Plan"  will  prove 
successful;  adherents  of  the  Rochdale  system  look  upon 
it  as  constituting  a  radical  departure  from  pure  coopera- 
tion. 

In  the  work  of  unifying  the  cooperative  societies 
the  national  cooperative  conventions,  the  All-American 
Cooperative  Commission,  and  the  Cooperative  League  of 
America  have  been  no  less  important  than  the  various 
wholesales.  The  first  American  cooperative  convention 
was  held  in  Springfield,  Illinois,  in  September,  1918,  under 
the  auspices  of  the  Cooperative  League  of  America,  and 
annual  conferences  are  now  held.  The  Cooperative  League 
of  America  is  the  central  national  union  of  cooperative 
societies,  whose  function  it  is  to  bind  these  societies  into 
a  closer  relationship  and  to  disseminate  information  and 
propaganda  in  behalf  of  the  cooperative  movement. 

Reasons  for  Slow  Development  in  the  United  States. — 
In  practically  every  country  of  Europe  the  cooperative 
movement  has  long  been  an  established  phase  of  economic 
life,  the  societies  numbering  into  the  thousands 
and  the  trade  turnover  into  billions  of  dollars.  Until 
recently  the  movement  in  the  United  States  has  had  no 


550  Cooperation 

such  auspicious  career.  In  new  countries,  such  as  the 
United  States  and  Canada,  the  abundance  of  economic 
resources  and  the  opportunity  for  economic  prosperity 
develops  a  powerful  spirit  of  individualism  and  competi- 
tive achievement.  There  is  neither  the  economic  necessity 
nor  the  individual  inclination  to  develop  a  system  of  co- 
operative enterprises.  But  these  conditions  change  as 
population  becomes  congested,  and  the  masses  are  forced 
to  buy  more  economically. 

The  slow  growth  of  cooperation  in  the  United  States 
can  be  explained  by  many  specific  causes.  Geographic 
isolation  of  individual  societies  has  prevented  solidarity 
and  mutual  protection.  Many  of  these  societies  have  been 
organized  by  men  totally  ignorant  of  sound  business  prin- 
ciples and  methods.  The  absence  of  a  spirit  of  thrift 
among  American  wage-earners  has  precluded  the  appeal 
of  small  economies.  Racial  and  national  prejudices  have 
kept  native  workmen  from  joining  the  cooperative  socie- 
ties formed  by  the  foreign-born.  Not  infrequently,  un- 
scrupulous managers  have  administered  the  stores  for 
selfish  purposes.  Excessive  extension  of  credit,  a  serious 
departure  from  pure  Rochdalism,  has  often  resulted  in 
the  accumulation  of  bad  debts  and  bankruptcy.  Similar 
disaster  has  been  caused  by  the  attempt  to  sell  commodi- 
ties below  cost  rather  than  at  prevailing  prices.  The 
strong  competition  of  immense  chain-stores,  department 
stores,  and  mail-order  houses  capitalized  at  millions  of 
dollars,  and  able  to  cut  prices,  has  obstructed  coopera- 
tive enterprises.  Sometimes  the  cooperative  movement 
in  this  country  has  degenerated  into  an  aggressive  labor 
movement,  placing  more  faith  in  industrial  warfare 
than  in  cooperative  buying  and  selling.  The  relatively 
high  mobility  of  the  American  wage-earner  has  not  con- 
duced to  a  permanent  interest  in  cooperative  societies  in 
particular  localities.  The  absence  of  strong  wholesale 
societies  has  placed  the  cooperative  retail  stores  at  the 
mercy  of  private  wholesalers.  The  lack  of  centralized 
administrative,  publicity,  and  educational  agencies  has 
contributed  to  the  failure  of  the  movement.  Finally,  the 


Cooperation  551 

opportunities  for  advancement  have  been  so  great  for 
the  man  of  exceptional  business  ability,  that  he  has  chosen 
either  to  work  for  a  private  corporation  at  an  attractive 
salary  or  to  go  into  business  for  himself,  rather  than  to 
enter  the  cooperative  movement.  Many  of  these  causes 
are  being  eliminated  and  the  future  is  more  promising. 


II.  Producers'  Cooperation 

Development  of  the  Movement. — Under  a  system  of 
true  producers'  cooperation  self-governing  workshops  are 
organized  and  operated.  The  workmen  furnish  or  borrow 
the  capital,  own  or  rent  the  establishment,  determine  their 
own  conditions  of  employment,  elect  administrative  com- 
mittees, and  share  in  the  distribution  of  profits.  The 
principle  of  one-man-one-vote  is  applied,  and  all  workers 
in  the  enterprise  are  admitted  to  membership.  As  Pro- 
fessor Gide  has  remarked,  producers'  cooperation  consists 
of  associations  of  workmen  who  work  by  themselves  for 
themselves,  and  keep  the  whole  product  of  their  toil; 
they  work  not  with  but  wthout  the  employer. 

1.  The  Movement  in  France. — The  medieval  gilds  were 
examples  of  producers'  cooperation,  but  with  their  decay 
workers  lost  their  partnership  status,  and  under  later 
industrial  organization  the  functions  of  employer  and  em- 
ployee became  sharply  differentiated.  Following  1834, 
there  grew  up  many  societies  founded  by  the  spontaneous 
action  of  the  workers  in  various  crafts.  The  ribbon-makers 
of  St.  Etienne,  impressed  with  the  success  of  the  jewelers' 
association  founded  by  Leroi  in  1833,  organized  a  pro- 
ductive society.  This  society  incurred  the  displeasure  of 
the  government  and  was  indicted  for  conspiracy,  its  mem- 
bers and  leaders  being  sent  to  prison. 

Not  until  the  close  of  the  Revolution  of  1848  was  the 
movement  for  control  of  production  by  the  workers  given 
great  impetus.  The  revolution  resulted  in  the  recognition 
by  the  provisional  government  of  the  right  of  workmen 
to  organize  a  society  of  tailors,  known  as  the  "Tailors  of 


552  Cooperation 

Cliche,"  to  make  uniforms  for  the  national  guard.  Ven- 
turing further,  the  government  lent  three  million  francs 
for  the  purpose  of  encouraging  cooperative  producers' 
societies.  Over  200  of  these  societies  came  into  existence, 
but  the  results  were  unsatisfactory ;  more  than  half  of  the 
loan  was  irretrievably  lost.  Considerable  fraud  was  prac- 
ticed in  securing  funds  from  the  government,  and  the 
%orkers  apparently  neglected  all  principles  of  discipline 
and  economy.  In  1863,  only  16  cooperative  producers' 
associations  existed  in  France.  In  that  year  a  revival  of 
the  movement  began,  and  the  Credit  du  Travail  was  es- 
tablished by  M.  Beleuze  to  supply  credit  to  the  new  associa- 
tions. In  1865,  a  second  bank,  Credit  au  Travail,  was 
organized  at  Lyons,  and  others  sprang  up  at  Lille  and 
St.  Etienne.  In  1868  there  were  93  cooperative  associations 
for  production,  but  in  that  year  the  Credit  au  Travail 
failed.  It  was  able  to  pay  its  creditors  only  18  per  cent 
of  its  liabilities,  and  most  of  the  cooperative  producers' 
societies  disappeared  with  it. 

During  the  labor  troubles  in  1879-1880,  cooperation  was 
again  resorted  to  as  an  aid  to  the  workers,  and  government 
subsidy  was  demanded.  In  1884  there  were  between  50 
and  60  producers  societies  in  Paris,  ten  of  which  dated 
from  1848,  another  10  from  1863,  while  the  remaining  35 
were  of  recent  origin.  In  1885  there  were  74  associations, 
and  in  1895  there  were  213  in  all  of  France;  165  of  these 
did  a  business  of  almost  $6,000,000.  In  1893  the  Banque 
des  Associations  Ouvrieres  des  Production  was  established 
in  Paris  to  supply  cooperative  producers'  societies  with 
necessary  capital.  In  1912  there  were  over  500  societies 
in  France,  with  a  membership  of  20,000,  and  production 
amounting  to  70,000,000  francs.  At  present,  producers' 
cooperation  in  France  is  promoted  by  the  Magasin  de  Gros, 
the  successful  wholesale  society.  A  chair  of  cooperation 
was  established  recently  at  the  College  de  France,  and 
Professor  Charles  Gide  was  appointed  to  it. 

2.  Cooperative  Production  in  the  United  Kingdom. — 
Apart  from  the  isolated  experiment  of  the  Birmingham 
tailors  in  1777,  cooperative  production  in  the  United  King- 


Cooperation  553 

'dom  prior  to  1850  was  confined  mostly  to  the  communistic 
communities  established  by  Robert  Owen  and  his  follow- 
ers. About  1850  "Redemption  Societies"  formed  in 
several  cities  were  devoted  to  different  kinds  of  productive 
enterprises,  such  as  shoe-making,  hat-making  and  shawl- 
making.  These  experiments  were  succeeded  by  the  Chris- 
tian Socialist  associations,  a  movement  influenced  con- 
siderably by  developments  in  France  directed  by  Louis 
Blanc  after  the  Revolution  of  1848.  Associations  formed 
by  the  Christian  Socialists  included  societies  of  tailors, 
bakers,  builders,  and  shoe-makers. 

About  1870  the  failures  of  cooperative  workshops  were 
so  numerous  that  the  application  of  the  principle  of  co- 
operation to  production  was  generally  thought  to  be  im- 
practicable. During  the  last  fifty  years  the  so-called  self- 
governing  workshops  have  been  greatly  modified.  In  1884 
it  was  estimated  that  224  associations  registered  since 
1852  had  failed  and  disappeared.  At  the  end  of  1899 
there  were  132  cooperative  producers'  societies  at  work 
in  Great  Britain,  most  of  which  were  of  recent  origin.  In 
1909  there  were  only  103  cooperative  producers'  societies 
in  existence,  very  few  of  which  had  operated  twenty 
years.  The  latest  report  of  the  Ministry  of  Labor  dealing 
with  these  associations  (1920)  shows  that  in  1918  there 
were  only  72  societies  in  existence. 

The  cooperative  producers'  societies  that  remain  in  the 
United  Kingdom  are  the  larger,  more  prosperous,  and 
better  established  ones,  so  that  the  number  of  employees 
has  not  diminished  much,  and  the  sales  and  profits  show 
very  large  increases.  The  trades  in  which  the  associations 
are  most  in  evidence  include  the  boot  and  shoe,  textile, 
clothing,  and  printing  trades.  In  1918  the  membership 
of  the  72  societies  comprised  4,599  organizations  and  21,481 
individuals.  The  share  and  loan  capital  amounted  to  a 
total  of  about  $5,000,000,  reserve  and  insurance  funds 
about  $1,260,000,  sales  approximately  $18,000,000,  and 
profit  about  $1,515,000.  As  in  the  case  of  all  business 
during  the  same  period,  the  earnings  were  influenced 
greatly  by  the  enormous  inflation  of  prices.  Most  of  the 


554  Cooperation 

goods  are  sold  to  cooperative  distributive  associations, 
which  hold  a  good  deal  of  the  capital  and  share  in  the 
management. 

The  future  of  cooperative  production  in  the  United 
Kingdom,  as  in  other  countries,  rests  in  the  hands  of  the 
cooperative  distributive  societies  rather  than  in  associa- 
tions of  workmen  for  production.  Local  retail  societies, 
federations  of  retail  societies,  and  national  federations 
as  the  English  and  Scottish  wholesales  are  constantly 
widening  their  scope  of  productive  operations.  The  value 
of  supplies  from  the  productive  works  of  the  English  Co- 
operative Wholesale  Society  amounted  to  approximately 
$160,000,000  in  1920,  as  compared  with  about  $64,000,000 
in  1915,  an  increase  of  147  per  cent.  The  value  of  the 
supplies  produced  by  the  Scottish  Wholesale  Society  in 
1920  was  about  $50,000,000,  as  compared  with  $25,000,000 
in  1916,  an  increase  of  100  per  cent.  Federations  of  con- 
sumers' societies,  such  as  the  British  wholesales,  are  able 
to  furnish  capital,  a  ready  market,  and  efficient  manage- 
ment for  productive  organizations. 

3.  Producers'  Cooperation  in  the  United  States. — There 
have  been  numerous  attempts  to  establish  cooperative 
associations  of  producers  in  the  United  States,  but  the 
experiments  have  met  with  severe  reverses.  The  early 
movement  included  the  associations  of  cabinet-makers  in 
Philadelphia  in  1833,  the  moulders  in  Cincinnati  in  1848, 
the  Boston  tailors  in  1849,  and  the  several  experiments 
in  the  shoe,  foundry,  and  furniture  business  in  Massachu- 
setts in  the  seventies  and  eighties.  In  the  latter  decade, 
the  Knights  of  Labor  promoted  many  cooperative  ventures 
in  production  and  distribution,  but  with  little  success. 
Labor  organizations  were  not  successful  in  their  experi- 
ments, chiefly  on  account  of  the  lack  of  business  experi- 
ence and  the  failure  to  adhere  to  disciplinary  measures. 
Ever  since  1868  an  interesting  movement  for  producers' 
cooperation  has  existed  among  the  coopers  of  Minneapolis. 
The  first  experiment,  which  was  designed  to  solve  the 
problem  of  unemployment  and  increase  wages,  failed,  and 
was  followed  by  another  attempt  in  1870  which  also  met 


Codperation  555 

disaster.  In  1874  the  Cooperative  Barrel  Manufacturing 
Company  was  organized,  and  is  still  functioning.  In 
1886  there  were  eight  associations  in  Minneapolis,  but  by 
1896  four  of  these  had  disappeared,  and  in  1904  only  three 
survived.  The  assets  of  the  three  companies  in  existence 
in  1917  were  greater  than  the  total  in  1886,  but  the  chang- 
ing conditions  of  the  industry  and  the  tendency  to  joint- 
stockism  indicates  that  these  experiments  may  soon  end. 

During  the  last  few  years  numerous  other  attempts  to 
establish  producers'  cooperation  have  been  made.  The 
Brotherhood  of  Maintenance  of  Way  Men  claims  to  have 
spent  over  $1,000,000  in  the  purchase  of  factories  and 
knitting  mills.  In  November,  1920,  a  cooperative  glovo 
factory  was  established  by  the  Glove  Workers'  Union  in 
Chicago,  as  a  result  of  a  strike  against  the  "open  shop." 
The  venture  is  capitalized  at  $10,000.  No  member  can 
own  more  than  $1,000  worth  of  stock  (20  shares),  and, 
regardless  of  the  number  of  shares  owned,  only  one  vote 
is  allowed  each  person.  It  is  agreed  to  pay  a  6  per  cent 
annual  dividend  on  capital  stock,  if  earned.  This  was 
paid  the  first  year  and  a  surplus  of  5  per  cent  was  put 
aside  for  educational  purposes.  Three  of  the  five  directors 
work  in  the  factory. 

In  recent  years  several  cooperative  building  associations 
have  been  formed  by  trade  unions  in  the  United  States,  one 
of  the  earliest  and  most  important  being  the  Building- 
Trades  Unions'  Construction  and  Housing  Council  of  Bos- 
ton, incorporated  under  the  laws  of  Massachusetts  in  1920. 
The  council  was  organized  with  a  capital  of  $500,000 ;  the 
shares  have  a  par  value  of  $10.  Stock  ownership  is  per- 
mitted to  any  holder  of  a  union  card,  and  each  member 
is  allowed  one  vote  regardless  of  the  number  of  shares 
owned.  Each  craft  is  entitled  to  one  representative  on  the 
board  of  directors,  and  there  is  but  one  salaried  official — 
the  business  manager.  In  making  estimates  for  jobs  the 
cost  of  materials  and  labor  is  figured  and  10  per  cent  is 
added  to  cover  overhead,  insurance,  and  profit.  On  this 
basis,  the  council's  price  is  usually  from  15  to  20  per  cent 
lower  than  that  charged  by  ordinary  contractors.  No  com- 


556  Cooperation 

plaint  has  ever  been  made  of  the  quality  of  work  or  ma- 
terials or  of  the  time  taken  for  completing  a  job. 

In  Washington,  Wisconsin,  and  North  Dakota  shingle 
mills,  slaughter  houses,  laundries,  bakeries,  and  packing 
plants  have  been  organized  as  producers'  enterprises.  It 
is  too  early  to  predict  the  probable  future  of  these  schemes, 
but  it  cannot  be  said  that  producers'  cooperation  has  here- 
tofore been  successful  in  this  country. 

Reasons  for  the  Failure  of  Producers'  Cooperation. — 
The  obstacles  encountered  by  cooperative  associations  of 
producers  are  many,  and  these  explain  the  general  failure 
of  the  movement.  (1)  Insufficient  capital.  Where  methods 
of  production  are  simple  and  the  amount  of  capital  required 
is  small,  producers'  cooperation  in  its  original  form  may 
succeed,  but  modern  industry  is  so  complex  and  the  amount 
of  capital  required  so  large  that  associations  of  workingmen 
are  seldom  able  to  engage  in  cooperative  production.  (2) 
Inability  to  meet  the  demands  of  the  market.  Because 
workingmen 's  associations  are  not  often  able  to  produce 
cheaply  enough  and  in  sufficient  quantities  to  satisfy  the 
demands  of  consumers,  it  is  difficult  for  them  to  build  up 
a  trade.  This  explains  why  such  associations  in  England 
and  France  have  disposed  of  their  products  to  consumers' 
cooperative  societies  or  to  the  government.  (3)  The  lack 
of  business  training  and  experience.  Managerial  ability 
has  been  scarce  among  the  workers,  chiefly  because  of  the 
lack  of  education.  Even  when  efficient  executives  have 
been  found,  the  workers  have  seldom  appreciated  the  im- 
portance of  intellectual  effort  and  have  been  unwilling  to 
pay  the  managers  a  share  equivalent  to  their  earning  capac- 
ity. (4)  The  tendency  towards  joint-stockism.  When  co- 
operative producers  are  successful  they  are  inclined  to 
make  their  associations  closed  corporations,  refusing  to 
admit  new  members,  and  engaging  hired  employees.  The 
results  of  producers'  cooperation,  however,  have  not  all 
been  adverse.  The  ideal  of  the  founders  here,  as  in  the 
case  of  consumers'  cooperation,  has  not  been  realized,  but 
these  associations  have  frequently  given  their  members 
greater  permanence  and  regularity,  of  employment,  im- 


Cooperation  £57 

proved  conditions  of  labor,  and  larger  incomes.  It  has 
been  claimed,  moreover,  that  such  experiments  have  im- 
proved the  character  of  the  workers,  introduced  true 
democracy  in  industry,  and  increased  production. 


III.  Distributors'  Cooperation 

Distributors'  Cooperation  in  the  United  States. — This 
form  of  cooperation  exists  chiefly  among  agriculturists 
in  the  United  States  and  Europe.  Agricultural  coopera- 
tion in  the  United  States  is  experiencing  unprecedented 
growth,  guided  by  such  associations  as  the  American 
Society  of  Equity,  the  National  Grange,  the  Farmers' 
Educational  and  Cooperative  Union,  and  the  American 
Farm  Bureau.  In  1917  there  were  5,462  farmers'  organ- 
izations of  various  kinds,  doing  an  annual  cooperative 
business  of  more  than  $625,000,000.  According  to  in- 
formation gathered  by  the  Census  Bureau,  the  total  sales 
in  1919  amounted  to  $721,983,639,  while  supplies  pur- 
chased cooperatively  were  valued  at  $84,615,669.  In  the 
order  of  their  importance  these  cooperative  enterprises 
are :  cooperative  elevators,  fruit  and  produce  associations, 
retail  stores,  live-stock  shipping  associations,  and  tobacco 
distributive  societies.  Fertilizer,  feed,  binder  twine, 
spraying  material,  coal,  crates,  and  boxes  are  among  the 
chief  items  purchased.  Four-fifths  of  all  the  citrus  fruit 
grown  in  California  is  sold  through  cooperative  agencies. 
The  California  Fruit  Growers'  Exchange,  having  a  mem- 
bership of  8,000,  shipped  between  15,000,000  and  16,000,- 
000  boxes  of  citrus  fruit  in  1918,  and  the  various  co- 
operative societies  in  that  state  had  an  aggregate  of  sales 
in  1919  valued  at  approximately  $128,000,000.  The  mem- 
bership of  the  cooperative  societies  in  Nebraska  in  1920 
was  over  57,000,  the  capital  almost  $8,000,000,  and  the 
the  annual  business  about  $93,000,000.  There  are  at 
least  2,000  cooperative  cheese  factories  and  3,000  cooperative 
creameries  in  the  United  States.  Iowa  had,  in  1920,  610 
cooperative  livestock  shipping  associations  which  sold  49,- 


558  Cooperation 

754  cars  of  stock,  or  one-fourth  of  the  total  from  that  state. 
The  total  value  of  the  shipments  made  by  the  associations 
was  almost  $104,000,000.  Minnesota,  Wisconsin,  Illinois, 
New  York,  and  Kansas  are  other  states  that  have  very 
successful  cooperative  agricultural  societies. 

IV.  Cooperative  Banking  and  Credit 

Cooperative  Credit  Societies. — 1.  Germany. — Coopera- 
tive credit  societies  have  achieved  their  greatest  success 
in  Europe,  especially  in  Germany.  It  was  in  1849  that 
Friedrich  Wilhelm  Raiffeisen,  the  founder  of  these  asso- 
ciations in  Germany,  started  his  first  cooperative  bank 
and  bakery  in  Westerwald,  with  a  capital  of  about  $1,500. 
Little  was  known  of  his  scheme  until  1874,  but  success 
crowned  his  efforts  before  his  death  in  1888.  In  that  year 
there  were  862  of  these  cooperative  credit  banks  in  exis- 
tence ;  to-day  they  number  at  least  4,000,  and  have  a  mem- 
bership of  more  than  300,000.  The  Raiffeisen  banks  have 
practically  no  share  capital;  the  members  receive  no 
dividends;  all  profits  remain  the  collective  property  of 
the  society  and  are  placed  in  the  reserve  fund  to  cover 
deficits,  or  in  the  foundation  fund  for  positive  improve- 
ment of  premises  and  for  charity.  Loan  capital  is  made 
up  of  small  savings  and  deposits,  drawn  from  a  wide 
constituency  of  members  and  nonmembers.  The  char- 
acter of  the  borrower  and  the  specific  object  of  the  loan 
are  scrutinized  carefully,  and  the  personal  pledge  is  the 
main  form  of  security.  All  offices  are  unpaid,  except 
sometimes  that  of  the  cashier,  and  business  is  conducted 
in  very  modest  quarters.  Members  are  jointly  responsible 
to  the  extent  of  all  their  property,  a  fact  which  explains 
why  these  banks  have  commanded  the  confidence  of  the 
general  public.  The  average  credit  advanced  per  member 
is  about  500  marks  and  the  interest  rate  is  between  4  and 
5  per  cent,  about  1  per  cent  cheaper  than  in  the  town 
banks.  The  duration  of  loans  varies  between  one  and  ten 
years,  and  they  are  repayable  in  small  installments  but 
may  be  repaid  in  a  lump  sum. 


Cooperation  559 

It  is  estimated  that  the  number  of  agricultural  credit 
societies  in  Germany  exceeds  17,000,  about  12,000  of  which 
are  patterned  after  the  Raiffeisen  type.  A  system  known 
as  the  Schulz-Delitzsch,  or  "People's  Banks,"  has  also 
been  organized,  which  furnishes  credit  to  small  producers, 
but  these  banks  are  quite  capitalistic  in  character.  Co- 
operative credit  associations  have  made  considerable 
progress  in  other  European  countries,  France  alone  hav- 
ing between  3,000  and  4,000  such  organizations.  There 
are  at  least  65,000  of  these  little  banks  or  credit  unions 
in  Europe  and  Asia,  doing  a  total  annual  business  of  over 
$7,000,000,000  and  sustaining  very  few  losses.  They  are 
owned  and  managed  by,  and  in  the  interest  of,  farmers 
and  wage-earners. 

2.  Great  Britain  and  the  United  States. — Cooperative 
credit  has  not  been  a  prominent  feature  in  the  cooperative 
movements  of  the  United  Kingdom  and  the  United  States. 
The  federal  farm  loan  or  rural  credits  law  of  July  17, 
3916,  provides  for  the  organization  of  joint-stock  land 
banks  and  farm  loan  associations  in  the  latter  country. 
There  has  been  much  prejudice  against  credit  societies 
in  the  British  Isles  on  account  of  the  belief  prevalent 
among  cob'perators  that  the  handling  of  credit  is  contrary 
to  the  fundamental  principles  of  cooperation.  In  both 
countries,  however,  building  and  loan  associations  have 
become  prominent  institutions.  The  purchase  of  shares  is 
arranged  for  the  convenience  of  persons  with  modest  in- 
comes, and  loans  are  made  for  the  purpose  of  purchasing 
or  building  homes,  the  property  being  held  as  security. 
Shares  arc  usually  in  denominations  of  $100  to  $200,  and 
may  be  purchased  on  the  monthly  installment  plan.  Each 
member  takes  out  one  or  more  shares,  and  the  interest 
allowed  on  the  amounts  paid  in  helps  to  reduce  the  sum 
owed  on  the  shares.  Loans  are  usually  granted  to  those  who 
offer  the  association  the  most  favorable  premium  in  addi- 
tion to  the  regular  rate  of  interest.  There  is  scrupulous 
Bcrutinization  of  all  transactions.  By  moans  of  the  in- 
terest which  the  borrower  pays  on  his  loan  and  the  pay- 
ments he  makes  on  his  shares,  he  liquidates  his  obligations 


560  Cooperation 

to  the  association.  The  number  of  associations  in  the 
United  States  increased  from  5,973  in  1895,  to  7,269  in 
1918.  In  the  latter  year  the  assets  of  the  societies  in  this 
country  amounted  to  $1,769,142,175  and  the  membership 
totaled  3,838,612. 

There  are  several  reasons  why  associations  of  this  type 
may  not  be  considered  a  permanently  important  factor  in 
elevating  the  position  of  the  wage-earners.  American 
labor  is  characterized  by  a  high  degree  of  mobility  which 
precludes  permanent  investment  in  homes  in  a  given 
locality,  and  the  increasing  cost  of  land  and  construction 
work  will  make  such  investment  more  difficult  for  the 
working  classes.  Unions  contend,  moreover,  that  em- 
ployers take  advantage  of  employees  who  own  their 
homes,  and  feel  freer  to  maintain  unsatisfactory  wage 
scales  and  working  conditions,  since  such  employees  can- 
not leave  the  locality  readily. 

Cooperative  Banking  Experiments  in  Great  Britain  and 
the  United  States. — After  a  series  of  conferences  concern- 
ing the  necessity  and  practicability  of  a  cooperative  bank- 
ing department,  the  members  of  the  English  Cooperative 
Wholesale  Society,  in  1872,  decided  to  start  banking 
operations.  The  first  years  of  banking  experience  were 
anything  but  successful,  partly  because  of  the  opposition 
of  a  minority  of  the  cob'perators  who  did  not  favor  the 
step  which  had  been  taken  by  the  society.  These  persons 
organized  an  "Industrial  Bank"  which  sustained  heavy 
losses  and  failed  after  a  brief  existence.  Although  losses 
were  sustained  by  the  banking  department  of  the  co- 
operative wholesale  society,  credit  operations  were  con- 
tinued. At  the  end  of  June,  1920,  there  were  5,754  cur- 
rent accounts  with  the  bank,  of  which  1,016  were  held 
by  cooperative  societies,  3,347  by  trade  unions  and  friendly 
societies,  and  1,391  by  clubs  and  other  mutual  organiza- 
tions. In  addition,  there  were  281  deposit  accounts  of 
trade  unions  and  friendly  societies  which  had  no  current 
accounts  with  the  department.  For  the  year  ending  June 
26,  1920,  the  total  deposits  and  withdrawals  reported  by 
the  banking  department  amounted  to  approximately 


Cooperation  561 

$2,942,056,020,  as  compared  with  $2,248,354,920  for  the 
corresponding  period  in  1918-1919.  This  was  an  increase 
of  $693,701,100,  or  about  30  per  cent.  A  branch  has  been 
established  in  London.  At  present  there  is  a  movement 
to  centralize  banking  facilities  in  special  national  co- 
operative banks  in  England,  Ireland,  and  Scotland,  with 
branches  catering  to  all  cooperative  and  allied  institutions. 
In  the  United  States  also,  there  is  a  definite  movement 
for  the  establishment  of  cooperative  credit  institutions. 
There  are  credit  unions  or  peoples'  banks  in  Massachu- 
setts, New  York,  North  Carolina,  and  other  states.  At 
least  nine  states  have  passed  laws  permitting  such  banks 
to  operate,  and  efforts  are  being  made  to  have  a  model 
law  on  the  statute  books  of  every  state.  This  movement 
is  directed  chiefly  by  the  Ail-American  Cooperative  Com- 
mission, with  headquarters  at  Washington.  The  organiza- 
tion aims  to  coordinate  and  encourage  cooperative  effort 
of  producers  and  consumers ;  to  unify  action  in  eliminating 
speculation  and  profiteering  in  the  necessities  of  life ;  and 
to  develop  intelligence,  mutual  understanding,  and  good- 
will. It  helped  to  start  the  Brotherhood  of  Locomotive 
Engineers'  Cooperative  National  Bank  at  Cleveland,  Ohio, 
which  opened  for  business  on  November  1,  1920,  with  a 
capital  stock  of  $1,000,000  and  a  paid-in  cash  surplus  of 
$100,000.  No  loans  or  profits  are  permitted  to  any  officer 
or  director  of  the  bank.  The  by-laws  limit  annual 
dividends  on  the  capital  stock  to  10  per  cent.  The  re- 
mainder of  the  earnings  go  first  to  build  up  a  surplus 
required  by  lew,  and  the  balance  is  distributed  among 
savings  depositors  and  trust  funds  on  a  pro  rata  basis. 
Savings  accounts  are  paid  4  per  cent  interest  and  com- 
mercial accounts  of  over  $500  are  paid  2  per  cent.  Tho 
bank  completed  its  first  year  of  operation  on  November 
1,  1921,  at  which  time  a  stock  dividend  of  6  per  cent 
was  paid  and  approximately  1  per  cent  was  returned  to 
depositors  of  savings,  in  addition  to  the  regular  4  per  cent 
interest.  At  the  close  of  December,  1921,  deposits  with 
the  bank  amounted  to  $7,883,450,  of  which  $5,802,818  was 
savings  deposits,  while  the  surplus  and  profits  totaled 


562  Cooperation 

$194,690.  Support  of  the  bank  has  come  from  all  over 
the  country. 

The  workers  of  the  United  States  have  shown  great 
interest  in  this  first  cooperative  national  bank,  and  other 
banks  are  to  be  organized  on  the  same  plan.  The  Pro- 
ducers' and  Consumers'  Cooperative  State  Bank  of  Tuc- 
son, Arizona,  is  prospering,  and  the  organized  workers 
of  Pennsylvania  have  made  plans  for  the  Producers'  and 
Consumers'  Cooperative  Bank  of  Philadelphia,  capitalized 
at  $100,000,000  divided  into  10,000,000  shares  of  $10  each, 
to  be  sold  to  trade  unionists  throughout  the  country.  This 
bank  is  being  organized  under  a  declaration  of  trust, 
which  confers  wide  powers.  The  Amalgamated  Clothing 
Workers  of  America  has  decided  to  establish  a  national 
bank  in  Chicago,  patterned  after  the  Locomotive  En- 
gineers' institution.  These  ventures  by  organized  labor 
portend  great  benefits  to  the  workers,  since  corporate  con- 
trol of  private  banks  has  proved  detrimental  to  the  work- 
ers' cause  in  time  of  strikes. 

Criticism  of  Cooperation. — Although  the  fundamental 
ideal  of  cooperation  has  not  been  greatly  assailed,  many 
objections  have  been  raised  by  its  opponents  against  the 
practicability  of  cooperative  ventures.  (1)  Distributive 
cooperation  tends  to  lower  prices  but  does  not  increase 
wages.  It  is  suggested  that  wages  are  lowered  because 
employers  are  inclined  to  take  advantage  of  savings  made 
to  the  workers  from  cooperative  buying,  and  to  make  this 
an  excuse  for  not  advancing  wages.  On  the  other  hand, 
workers  who  belong  to  cooperative  societies  try  to  keep 
the  cost  of  operation  down  by  paying  employees  a  low 
wage.  Experience  for  the  most  part  refutes  these  charges. 
Cooperative  societies  usually  sell  at  prevailing  market 
prices,  and  provide  higher  wages  and  better  conditions 
of  employment  than  are  found  in  private  establishments. 
(2)  Cooperation,  instead  of  being  a  social  organization,  is 
composed  chiefly  of  dividend-hunting,  self-seeking  persons 
who  have  no  social  and  public  spirit.  While  there  is  a 
modicum  of  truth  in  this  accusation,  the  experience  of  co- 
operation in  every  country  manifests  sacrifice  and  devo- 


Cooperation  563 

tion  to  the  common  good  on  the  part  of  the  men  and 
women  who  direct  cooperative  movements. 

(3)  Cooperation  tends  to  develop  numerous  small,  com- 
peting organizations,  or  great  monopolies  that  result  in 
public  harm  and  stimulate  the  movement  towards  social- 
ism. Federation  is  eliminating  rivalry  of  interest  between 
the  competing  societies,  and  there  is  no  reason  to  believe 
that  these  organizations  which  are  organized  for  mutual 
benefit  will  result  in  public  injury.  Cooperation  does  not 
necessarily  lead  to  socialism,  but,  if  it  does,  the  method 
is  both  evolutionary  and  constructive.  (4)  The  coopera- 
tive movement  weakens  labor  organizations,  since  profits 
are  sought  and  the  improvement  of  industrial  conditions 
disregarded.  In  every  country  trade  unionism  and  co- 
operation are  powerful  allies  in  the  cause  of  advancing 
the  political  and  economic  interests  of  the  workers.  Co- 
operation is  not  a  substitute  for,  but  a  supplement  to 
unionism.  (5)  Cooperation  is  a  middle-class  movement. 
There  is  evidence  that  in  some  countries  the  middle  class 
is  gaining  control  of  the  movement,  but  in  the  United 
States  and  in  most  other  countries  cooperation  is  con- 
trolled directly  by  men  and  women  from  among  the 
manual  workers.  (6)  Cooperation  is  a  compromise  with 
capitalism.  This  objection  is  raised  by  the  revolutionary 
groups  in  every  cotmtry  who  denounce  all  opportunistic 
reforms.  More  constructive  radicals  endorse  cooperation 
as  an  effective  agency  for  economic  reorganization.  (7) 
Cooperative  societies  are  difficult  to  establish.  There  arc 
serious  obstacles,  but  the  phenomenal  growth  of  coopera- 
tion in  almost  every  country  in  the  world  is  striking 
evidence  of  its  practicability. 

Conclusions. — Cooperation  has  an  enormous  grasp  upon 
the  common  people  of  the  world  who  have  a  deep  faith 
in  its  efficacy  as  an  economic  reform.  It  has  not  trans- 
formed nor  regenerated  capitalism,  and  the  cooperative 
commonwealth  has  not  been  established.  Within  the  shell 
of  the  present  order,  however,  the  cooperative  movement 
is  conferring  great  benefits  upon  the  workers.  Alone,  co- 
operation will  not  solve  the  problems  of  the  wage-earning 


\ 

564  Cooperation 

classes,  but  in  conjunction  with  unionism  and  other  agen- 
cies it  will  protect  the  workers'  interests  against  those 
who  would  exploit  them.  The  advantages  accruing  to 
the  working  classes  from  cooperative  enterprises  are 
many.  Aside  from  the  monetary  benefits  derived,  co- 
operation acquaints  its  supporters  with  the  practical 
methods  and  policies  of  business  administration,  develops 
an  awakened  and  intelligent  interest  in  the  political  and 
economic  life  of  the  nation,  promotes  the  spirit  of  mutual 
social  service  and  altruism,  and  creates  a  financial  reserve 
and  an  economic  organization  to  aid  the  workers  in 
periods  of  unemployment  and  economic  distress.  The 
ideal  of  cooperation  will  always  survive  because  it  is 
founded  upon  the  finest  principle  of  human  conduct — 
mutual  service.  Moreover,  it  constitutes  one  of  the  most 
rational  methods  of  economic  readjustment. 


SELECTED  REFERENCES 

ADAMS,  T.  S.,  AND  SUMNEB,  H.  L.,  Labor  Problems,  1905, 
Chap.  X. 

AVES,  ERNEST,  Cooperative  Industry,  1907. 

BUBNOV,  I.  V.,  The  Cooperative  Movemnt  in  Russia,  1917. 

COOPERATIVE  LEAGUE  OF  AMERICA,  Publications. 

ENGLISH  AND  SCOTTISH  COOPERATIVE  WHOLESALE  SOCIETIES, 
Annual  Reports  and  The  People's  Year  Book,  1918. 

FAY,  C.  R.,  Cooperation  at  Home  and  Abroad,  1908. 

FLANAGAN,  J.  A.,  Wholesale  Cooperation  in  Scotland,  1920. 

FORD,  JAMES,  Cooperation  in  New  England,  1913. 

HARRIS,  E.  P.  AND  OTHERS,  Cooperation,  1918. 

HOLYOAKE,  G.  J.,  The  Cooperative  Movement  of  To-day,  1891. 

JONES,  BENJAMIN,  Cooperative  Production,  1894. 

LEE,  F.  E.,  The  Russian  Cooperative  Movement,  1920. 

PARKER,  F.  E.,  Aims  and  Possibilities  of  the  Consumers'  Co- 
operative Movement,  Monthly  Labor  Review,  10:117-122, 
June,  1920. 

SCHLOSS,  D.  F.,  Methods  of  Industrial  Remuneration,  second 
edition,  1894,  Chaps.  XXII-XXIV. 

SONNICHSEN,  ALBERT,  Consumers'  Cooperation,  1919. 

UNITED  STATES  BUREAU  OP  LABOR  STATISTICS,  Monthly  Labor 
Review,  8:132-144,  March,  1919;  10:117-130,  April,  1920; 
10 :117-122,  June,  1920. 


Cooperation  565 

WATKINS,  G.  S.,  Cooperation:  A  Study  in  Constructive  Economic 

Reform,  1921. 

WEBB,  CATHERINE   (editor),  Industrial  Cooperation,  1919. 
WEBB,  SIDNEY  AND  WEBB,  BEATRICE,  The  Consumers'  Cooperative 

Movement,  1921. 

WOLFF,  H.  W.,  Cooperative  Credit  for  the  United  States,  1917. 
WOOLF,  L.  S.,  Cooperation  and  the  Future  of  Industry,  1919. 
ZELENKO,  A.  J.,  The  Russian  Cooperative  Movement,  Monthly 

Labor  Review,  10:122-130,  June,  1920. 


CHAPTER  XXIV 

SOCIALISM 

Socialism  Defined. — Of  all  the  remedies  proposed  for 
labor  problems  the  most  radical  is  socialism.  All  other 
reforms  are  considered  by  the  socialists  as  temporary 
expedients,  mere  palliatives,  to  be  tolerated  only  so  long 
as  society  fails  to  appreciate  the  thoroughgoing  proposals 
of  socialism.  According  to  their  analysis,  it  is  not  mend- 
ing but  complete  reorganization  that  the  present  indus- 
trial system  needs. 

The  term  socialism,  as  opposed  to  individualism,  seems 
to  have  been  first  employed  by  Pierre  Leroux,  a  French 
socialist,  in  1838.  As  a  title  of  a  book  it  was  first  used 
with  the  publication  of  Robert  Owen's  "What  is  Social- 
ism?" in  1841.  From  its  inception  socialism,  in  one  form  or 
another,  has  been  the  expression  of  revolt  against  the 
evils  of  a  capitalistic  system  dominated  by  the  spirit  and 
practices  of  laissez-faire,  or  the  doctrine  of  noninterference 
with  industrial  enterprise.  The  term  socialism  has  never 
had  a  definite  connotation;  it  has  never  designated  a  con- 
sistent type  of  philosophy  or  body  of  doctrines.  The  critics 
of  socialism  have  complained  that  no  two  socialists  agree 
in  their  definitions  of  the  tenets  and  aims  of  socialism,  and 
that  there  are  as  many  varieties  of  socialism  as  there  are 
socialists.  Although  there  is  an  element  of  truth  in  this 
somewhat  exaggerated  criticism,  there  exists  among  social- 
ists sufficient  uniformity  of  teaching  to  make  possible  a 
definition  that  is  generally  applicable  to  the  more  orthodox 
forms.  Briefly,  socialism  is  a  system  of  philosophy  which 
requires  that  the  whole  machinery  of  production  and  dis- 
tribution of  goods  and  services  shall  be  owned,  controlled, 
and  operated,  not  by  individuals  and  competitive  forces 
in  the  interests  of  a  few,  but  by  society  in  a  cooperative 

566 


Socialism  567 

manner  for  the  advantage  of  all.  Socialism  is  at  once 
a  criticism  of  the  existing  order,  a  philosophy  of  social 
progress,  a  conception  of  an  ideal  society,  and  a  definite 
movement  for  social  reorganization. 

There  are  certain  beliefs  which  are  generally  held  by 
all  groups  that  can  be  designated  accurately  as  orthodox 
socialist  schools.  (1)  They  attribute  the  ills  and  disorders 
of  the  present  to  the  private,  or  class  ownership,  of  the 
agencies  of  production  and  distribution,  and  the  conse- 
quent concentration  of  wealth  in  the  hands  of  a  few, 
who  are  able  to  exploit  the  masses.  (2)  There  is  desired 
a  new  social  order  in  which  collective  ownership  shall 
be  substituted  for  private  ownership  and  control  of  the 
instruments  of  production  and  exchange,  and  in  which 
there  shall  be  equality  of  opportunity,  and  freedom  from 
exploitation  and  class  domination.  (3)  An  international 
revolutionary  movement  is  sponsored  which  aims  to  enlist 
principally,  if  not  exclusively,  the  working  class,  includ- 
ing those  who  are  described  as  hand-workers  and  brain- 
workers.  While  all  true  socialists  believe  in  revolutionary 
action,  this  does  not  necessarily  mean  the  use  of  violent 
methods,  as  is  generally  supposed.  The  term  revolution 
as  here  used  indicates  a  sudden  culmination  of  evolu- 
tionary and  ripening  processes. 

Types  of  Socialism. — The  varieties  of  socialism  are  so 
numerous  that  no  single  statement  can  suggest  the  funda- 
mental theories  and  practices  of  the  different  socialist 
groups.  The  preceding  definition  applies  chiefly  to  forms 
of  orthodox  .socialism.  It  is  necessary,  therefore,  to  dis- 
tinguish between  the  various  varieties  of  teachings  that 
are  usually  classified  as  socialistic. 

1.  Utopian  Socialism. — The  modern  socialist  movement 
had  its  inception  in  the  remote  past.  The  annals  of  human 
progress  are  replete  with  the  messages  of  prophets  who 
have  protested  against  the  old,  and  dreamed  of  a  new 
social  order.  Plato  in  his  "Republic,"  Campanella  in  his 
"Civitas  Solis,"  and  Sir  Thomas  More  in  his  "Utopia,  "were 
among  the  early  protagonists  of  a  reorganized  society.  The 
term  "Utopian  Socialists,"  however,  is  commonly  used  in 


568  Socialism 

reference  to  snch  writers  as  Saint-Simon  (1760-1825), 
Fourier  (1772-1837),  Proudhon  (1809-1865),  Cabet  (1788- 
1856),  and  Robert  Owen  (1771-1858).  These  Utopians, 
from  whom  subsequent  socialist  schools  have  been  careful 
to  distinguish  themselves,  believed  that  the  existing  order 
of  individualism  was  functioning  in  the  interests  of  a  few 
privileged  individuals,  and  was  denying  to  the  great  mass 
of  people  adequate  opportunities  for  initiative,  liberty,  self- 
expression,  and  the  numerous  benefits  of  associational  life. 
A  new  social  environment  was  necessary,  in  which  the 
development  of  individuality  would  be  assured.  Such  an 
environment  they  thought  could  be  secured  only  by  an 
ideal  society  in  which  voluntary  association  and  cooperative 
effort  would  obtain,  and  from  which  competition  and  the 
evils  of  the  factory  system  would  be  absent.  Not  only  did 
they  formulate  the  fundamental  principles  and  practices 
that  should  govern  this  ideal  cooperative  state,  but  they 
inaugurated  numerous  experiments  in  communistic  life. 
Among  the  best  known  of  these  experiments  were  Owen's 
colonies  at  New  Lanark,  Scotland,  and  New  Harmony,  In- 
diana, during  the  first  quarter  of  the  nineteenth  century. 
These  and  other  attempts  to  organize  communistic  societies 
in  France,  Great  Britain,  and  the  United  States  were  short- 
lived. Their  proposals  for  an  artificially  created  society 
earned  for  them  the  name  "Utopians."  The  obstacles  to 
the  establishment  of  these  artificial,  isolated  communities 
in  the  midst  of  a  social  order  dominated  by  opposite  motives 
were  insurmountable,  and  the  decay  of  this  early  socialist 
movement  was  inevitable. 

2.  Christian  Socialism. — During  the  middle  of  the  nine- 
teenth century  when  the  political  and  economic  institutions 
of  Continental  Europe  were  being  shaken  to  their  very 
foundations,  there  emerged  in  England  a  reform  movement 
which  became  known  as  Christian  Socialism.  F.  D. 
Maurice,  J.  M.  Ludlow,  and  Charles  Kingsley  were  among 
the  leaders  of  this  new  school  of  socialist  philosophy.  Some 
of  its  exponents  were  convinced  that  if  socialism  were  not 
Christianized  it  would  destroy  Christianity,  while  others 
believed  that  the  spirit  of  free  competition  and  rivalry 


Socialism  569 

which  permeated  the  economic  order  would  lead  inevitably 
to  anarchism,  the  destruction  of  the  property  of  the  rich, 
and  the  increasing  misery  of  the  poor.  In  opposition  to 
the  competitive  system  of  production  and  distribution  there 
was  proposed  cooperative  production  or  workingmen's  asso- 
ciations. In  "Alton  Locke,"  the  eloquent  English  clergy- 
man, Charles  Kingsley,  first  enunciated  in  fiction  form  the 
doctrine  of  socialism  and  revolt  against  the  evils  of  the 
sweating  system.  He  denounced  the  existing  social  system 
as  contrary  to  the  spirit  of  the  kingdom  of  God  as  revealed 
in  Christ.  The  early  movement  was  not  successful  in  con- 
vincing the  working  class  of  the  value  and  practicability 
of  its  program  although,  beginning  with  1850,  some 
cooperative  producers'  associations  were  organized.  The 
efforts  of  the  Christian  Socialists  were  more  constructive 
when  directed  toward  the  securing  of  social  legislation 
in  behalf  of  labor,  such  as  the  "Industrial  and  Provident 
Partnerships  Act"  of  1852,  and  other  measures  which 
promoted  cooperation  and  reform.  In  1889  a  society  of 
Christian  Socialists  was  organized  in  the  United  States 
in  the  city  of  Boston.  During  the  last  thirty  years  there 
has  developed  in  almost  every  civilized  country  a  prom- 
inent movement  that  seeks  to  apply  the  principles  of 
Christianity  to  industrial  life. 

3.  Marxian  or  "Scientific"  Socialism. — Contemporane- 
ously with  the  emergence  of  Christian  socialism,  Marxian, 
or  so-called  scientific  socialism  was  developed.  The 
Marxist  movement  really  begins  with  the  publication  of 
the  Communist  Manifesto  in  1848.  This  remarkable  docu- 
ment was  written  by  the  two  famous  founders  of  modern 
socialism,  Karl  Marx  (1818-1883)  and  Frederick  Engela 
(1820-1895),  German  socialist  exiles  who  were  forced  to 
leave  their  native  country  during  the  revolutionary  up- 
heavals of  the  forties  and  resided  in  France  and  England. 
The  pronouncements  of  Marx  and  Engels  are  sharply 
differentiated  from  those  of  the  early  Utopians.  Little  or 
no  attempt  is  made  to  picture  the  structure  of  an  ideal 
state  of  society.  Attention  is  given  rather  to  an  analysis 
of  industrial  conditions,  economic  tendencies,  and  the 


570  Socialism 

social  forces  that  are  operating  to  destroy  capitalism  and 
usher  in  the  socialist  commonwealth.  The  principal  doc- 
trines of  Marxian  socialism  include  the  evolutionary  con- 
cept of  society,  the  economic  interpretation  of  history, 
the  theory  of  the  class  struggle,  the  theory  of  surplus 
value,  and  the  explanation  of  crises. 

4.  State  Socialism. — State  socialism  had  its  origin  and 
most  notable  development  in  Germany,  beginning  with 
the  Congress  of  Eisenach  in  1872,  and  extending  down 
to  the  present  time.    The  state  is  looked  upon  as  a  great 
moral  institution  for  the  education  and  protection  of  hu- 
manity.   Because  of  this  conception  of  the  broad  functions 
of  the  state,  state  socialism  has  signified  a  conscious  at- 
tempt to  extend  the  regulatory  powers  of  government 
without  modifying  very  greatly,  and  without  destroying 
the  fundamental  institutions  of  the  existing  social  order. 
Profits,  interest,  rent,  wages,  and  other  expressions  of  the 
institution    of    private    property    are    to    continue,    sub- 
ject to  governmental  limitation- and  control  in  the  interest 
of  social  progress.     The  movement  has  had  remarkable 
influence  on  protective  labor  legislation  in  Germany  dur- 
ing the  last  forty  years,  and  has  had  no  insignificant  effect 
upon  similar  extension  of  state  interference  in  Australasia, 
Great  Britain,  the  United  States,  and  other  countries.    In 
securing  many  necessary  social  reforms  state  socialism 
has  frequently  counteracted  the  growth  of  more  radical 
forms  of  socialism. 

"Socialism  of  the  Chair"  also  grew  out  of  the  Congress 
of  Eisenach,  this  term  being  applied  to  a  number  of  young 
German  professors  of  economics  who  believed  that  the 
existence  of  grave  economic  and  social  evils  warranted 
any  extension  of  state  authority  compatible  with  the 
public  welfare.  This  movement  was  a  protest  against  the 
policy  of  individualism,  and  although  it  now  has  only 
historical  significance,  its  central  ideas  were  given  a  more 
radical  bias  and  were  propagated  by  state  socialism  and 
the  whole  social  democratic  movement  in  Germany. 

5.  Fabianism. — What  is  commonly  known  as  the  Fabian 
School  of  Socialists  is  a  movement  sponsored  by  certain 


Socialism  571 

intellectuals  in  the  United  Kingdom,  among  whom  are 
Sidney  and  Beatrice  Webb,  George  Bernard  Shaw,  H.  G. 
Wells,  Graham  Wallas,  and  others.  The  movement  pro- 
poses the  "reorganization  of  society  by  the  emancipation 
of  land  and  industrial  capital  from  individual  and  class 
ownership,  and  the  vesting  of  them  in  the  community 
for  general  benefit."  Gradual  development  of  society 
into  a  cooperative  commonwealth  is  aimed  at,  but  chiefly; 
through  educational  methods.  The  Fabian  Society  con- 
ducts research  and  investigations  of  industrial  and  social 
movements  such  as  trade  unionism,  collectivism,  and  social 
insurance,  and  has  contributed  much  to  the  progress  of 
social  legislation.  While  the  Fabians  are  very  critical  of 
extreme  Marxism,  they  have  done  a  great  deal  to 
familiarize  the  public  with  the  fundamental  teachings  of 
collectivism. 

6.  Guild  Socialism. — Guild  socialism  is  a  movement  that 
has  developed  recently  in  England  under  the  guidance 
of  the  National  Guilds  League  which  was  organized  in 
1915.  Its  prominent  writers  and  leaders  include  S.  G. 
Hobson  and  G.  D.  H.  Cole.  The  central  concept  of  guild 
socialism  is  that  the  management  and  control  of  industry 
should  be  vested  directly  in  the  hands  of  the  producers, 
under  a  system  of  regulation  designed  to  promote  the 
common  welfare.  It  is  really  an  attempt  to  revive  the 
spirit  of  medieval  gild  life.  The  national  guildsmen,  as 
the  members  of  this  group  call  themselves,  believe:  (1) 
that  the  present  educational  system  prepares  only  a 
privileged  few  for  the  full  responsibilities  of  citizenship 
and  trains  the  majority  for  industrial  subordination  and 
servile  labor;  (2)  that  the  modern  industrial  system  is 
organized  for  profit  and  not  for  social  service  and  the 
development  of  personality;  and  (3)  that  the  modern 
political  state  fails  to  represent  all  the  citizens  of  the 
commonwealth.  The  guildsmen  mean  by  the  common- 
wealth the  all-inclusive  relation  of  human  personalities, 
the  association  of  all  citizens,  while  the  state  is  looked 
upon  as  the  parliamentary  machinery  through  which  the 
common  will  is  expressed.  The  state  as  organized  to-day 


572  Socialism 

functions  in  the  interest  of  a  dominant  economic  class, 
as  does  the  entire  industrial  system. 

The  development  of  personality,  and  not  merely  indus- 
trial efficiency,  is  the  aim  of  guild  socialism.  It  proposes 
an  organization  of  society  in  which  the  state  will  perform 
noneconomic  functions ;  and  national  guilds,  aided  by  shop 
committees  and  local  and  district  guilds  of  producers, 
will  perform  the  economic  functions.  Adequate  machinery 
is  to  be  provided  for  the  protection  of  producers  and 
consumers  in  both  their  separate  and  their  common  in- 
terests. The  national  guildsmen  have  already  formed 
workers'  guilds  in  the  building  industry  in  England. 

7.  Bolshevism. — Marxian  socialism  is  comprised  of  two 
major  divisions  often  referred  to  as  communism  and  col- 
lectivism. While  the  collectivists  desire  the  abolition  of 
private  property  only  in  the  agencies  of  production, 
many  communists  propose  the  abolition  of  private  prop- 
erty in  the  production,  distribution,  and  consumption  of 
goods.  The  recent  revival  of  international  communism 
is  the  result  chiefly  of  the  bolshevik  party  in  Russia. 
Unlike  the  Utopians,  contemporary  communists  do  not  urge 
abolition  of  private  property  in  consumption  goods. 

Socialism,  Trade  Unionism,  Syndicalism,  and  Anarch- 
ism.— The  socialist  movement  is  incorrectly  associated  in 
the  popular  mind  with  all  forms  of  liberalism;  and  con- 
siderable confusion  obtains  as  to  the  relation  of  socialism 
to  trade  unionism,  syndicalism,  and  anarchism.  Although 
there  are  some  points  of  resemblance  among  all  of  these 
theories  and  practices,  they  are  far  from  being  identical. 
In  a  previous  chapter  it  was  pointed  out  that  trade  union- 
ism is  essentially  conservative  and  practical  in  its  pro- 
gram, seeking  through  industrial  action  chiefly,  and 
through  parliamentary  representation  only  indirectly,  the 
improvement  of  the  wage-earning  class.  The  emphasis  is 
placed  upon  immediate  improvement  of  standards  of 
wages,  hours,  and  conditions  of  labor.  Although  there 
are  within  the  ranks  of  trade  unions  a  great  many  in- 
dividuals who  endorse  the  socialist  program  for  the 
reorganization  of  society,  the  movement  itself  is  not 


Socialism  573 

revolutionary.  When  we  turn  to  syndicalism  or  revolu- 
tionary industrial  unionism  we  find  disagreement  with  the 
doctrines  of  collectivism.  The  revolutionary  industrial 
unionists  denounce  political  action  and  the  idea  of  a 
political  state.  Their  ideal  is  an  industrial  commonwealth, 
controlled  by  and  functioning  in  the  interest  of  the  work- 
ers. Syndicalists  are  uncompromisingly  opposed  to  craft 
unionism  and  reformist  or  political  socialism.  They  are 
opposed  to  the  former  because  it  splits  into  fragments 
the  workers'  organizations,  and  to  the  latter  because  it 
encourages  social  reform  and  seeks  to  establish  a  pro- 
letarian commonwealth  through  political  action.  Syn- 
dicalism and  bolshevism  have  much  more  in  common  than 
have  collectivism  and  syndicalism. 

Anarchism  is  erroneously  referred  to  as  a  form  of 
socialism.  Except  for  the  belief  common  to  both  that 
private  property  is  incompatible  with  the  complete  inde- 
pendence and  development  of  the  individual,  or,  at  least, 
that  it  bestows  independence  upon  some  at  the  expense 
of  others,  socialism  and  anarchism  have  practically  no 
doctrines  that  are  similar.  Anarchism  is  in  reality  the 
antithesis  of  socialism ;  the  latter  believes  in  the  extension 
of  collective  authority,  while  the  former  would  abolish  all 
authority,  destroy  the  state,  and  do  away  with  all 
economic  and  social  institutions.  Anarchism  is  ultrain- 
dividualism.  The  individualists,  among  whom  are  num- 
bered most  employers,  believe  in  the  reduction  of  state 
interference  to  a  minimum,  while  the  anarchists  go  further 
and  seek  to  eliminate  government  entirely. 

The  Socialist  Internationals. — Generally  speaking,  the 
socialist  movement  may  be  divided  into  four  phases.  1. 
Utopianism.  The  humanitarian  movement  began*  with  the 
earliest  prophets  of  social  amelioration,  and  assumed  more 
definite  form  during  the  late  eighteenth  and  early  nine- 
teenth centuries.  This  movement  includes  the  activities  of 
reformers  in  the  period  of  the  great  French  Revolution  and 
those  whose  Utopian  schemes  we  have  already  considered. 
This  first  phase  was  concerned  chiefly  with  humanitarian 
and  idealistic  schemes  for  the  uplift  of  the  race,  which  was 


574  Socialism 

suffering  immeasurable  misery  from  the  effects  of  indus- 
trial changes. 

2.  The  First  International. — The  international  socialist 
movement  really  began  with  the  publication  of  the  Com- 
munist Manifesto  in  1848.     In  that  brief  document  Marx 
and  Engels  uttered  the  slogan  which  has  become  the  battle 
cry  of  orthodox  socialism  everywhere — "Workingmen  of 
all  countries,  unite!"    Reaction  spread  in  Europe,  follow- 
ing the  failure   of  the  revolutionary  movements   of  the 
forties,  and  for  a  time  the  growth  of  socialism  was  checked. 
Later   a   strong   labor   movement   emerged   that   renewed 
socialist  and  labor  activities.     It  was  at  this  time  that 
the  international  note  struck  in  the  Communist  Manifesto 
was  incorporated  into  the  constitution  and  declaration 
of  principles  of  the  International  Workingmen's  Associa- 
tion in  1864.     This  organization  is  commonly  known  as 
the  First  International.    It  spread  to  many  countries.    For 
a  period  of  about  eight  years,  from  1864  to  1872,  many 
conventions  were  held  which  were  devoted  to  the  discus- 
sion of  the  problems  of  the  working  class.     These  con- 
ferences united  the  socialist  movement  in  Europe  and 
America.     The  First  International  was  disrupted  by  a 
struggle  between  the  Marxian  wing  of  socialism,  under 
the    leadership    of    Karl    Marx,    and    the    communistic- 
anarchist   wing,   led   by  Michael   Bakounin    (1814-1876). 
Bakounin,    a    violent    Russian    revolutionist,    denounced 
evolutionary  methods  and  political  action  and  sought  to 
capture  the  movement  for  communist  anarchism  based 
upon   "complete   individual   liberty  restrained   only   by 
natural  law."    To  save  the  organization  from  anarchism 
the  seat  of  the  First  International  was  transferred  to  New 
York  in  1872,  and  three  years  later  it  was  dissolved. 

3.  The  Second  International. — This  association  originated 
in  1889,  in  Paris,  chiefly  as  an  attempt  to  unite  the  socialist 
movements  throughout  the  world  against  militarism.    Be- 
tween the  date  of  its  organization  and  the  first  years  of 
the  World  War  this  association  held  innumerable  con- 
ferences protesting  against  the  wars  that  repeatedly  dis- 
turbed the  peace  and  the  happiness  of  Europe  and  of  the 


Socialism  575 

world,  and  demanding  that  the  workers  be  given  a  voice 
in  the  councils  of  nations.  The  Second  International  prac- 
tically ceased  to  function  when  the  socialists  in  the  various 
warring  countries  openly  supported  their  governments  in 
the  great  war.  The  movement  has  been  kept  alive  by  a 
loyal  minority  and  is  now  engaged  in  a  struggle  with  the 
Third  International. 

4.  The  Third  International. — The  Third  or  Communist 
International  was  organized  with  an  extremely  radical 
bias  at  the  first  congress  of  international  communists  in 
Moscow,  March  2-6,  1919.  It  was  sponsored  by  the  Rus- 
sian bolshevists  who  had  emerged  victorious  in  the  great 
Russian  Revolution  in  1917,  and  included  left-wing  or 
ultraradical  socialists  from  many  countries.  The  Third 
International  is  essentially  a  protest  against  reformist, 
political  socialism  and  seeks  the  nationalization  of  eco- 
nomic life  controlled  not  by  a  parliamentary  state  but  by 
workingmen's  organizations  known  as  Soviets.  There  are 
many  evidences  that  a  more  moderate  program  may  be 
adopted.  While  the  radical  socialist  groups  in  many 
countries  have  joined  the  Third  International,  the  con- 
servative socialist  organizations,  which  believe  in  political 
action,  have  refused  affiliation.  The  new  international 
has  met  annually  at  Moscow,  Russia,  and  has  modified 
repeatedly  the  tactics  of  the  communists. 

The  Socialist  Indictment  of  Capitalism. — From  what  has 
already  been  said,  it  should  be  clear  that  the  socialist 
movement  is  fundamentally  a  working-class  revolt  against 
what  are  conceived  to  be  serious  evils  inherent  in  the 
capitalistic  system  of  production  and  distribution.  Social- 
ism, therefore,  is  really  the  product  of  capitalism,  since 
it  is  the  abuses  of  the  latter  that  have  given  rise  to  revolu- 
tionary agitation.  Socialists  not  only  criticize  capitalism, 
but  propose  a  substitution  for  it  in  the  form  of  collective 
ownership  of  the  agencies  of  production,  such  as  land, 
mines,  systems  of  transportation,  et  cetera.  Socialism's 
indictment  of  capitalism  is  directed  against  the  wastes  in 
human  life  incident  to  the  industrial  system :  and  wastes 
in  human  effort,  materials,  and  wealth  which  it  claims 


576  Socialism 

are  inevitable  under  a  competitive  system  of  production 
and  distribution.  This  indictment  has  been  well  sum 
marized  by  Dr.  Laidler  as  follows:  "Socialists  do  not 
necessarily  base  their  advocacy  of  a  new  social  order  on 
the  ground  that  the  lot  of  the  workers  is  becoming  abso- 
lutely worse.  They  do  believe,  however,  that  capitalism 
is  failing  properly  to  utilize  the  marvelous  productive 
forces  at  its  command;  that  the  hand  and  brain  workers 
are  sharing  but  inadequately  in  the  increased  productivity 
of  modern  industry;  that  capitalism  retards  the  develop- 
ment of  individuality  among  the  masses  of  mankind  and 
that,  having  largely  performed  its  social  function  and 
outgrown  its  usefulness,  it  should  yield  to  a  more  scientific 
and  equitable  industrial  order  than  at  present  exists."  l 

The  Doctrines  of  Marxian  Socialism. — 1.  The  Economic 
Interpretation  of  History. — This  doctrine,  which  in  com- 
mon with  the  other  fundamental  teachings  of  scientific 
socialism  was  formulated  by  Marx  and  Engels,  is  based 
upon  the  proposition  that  economic  factors — the  conditions 
of  production  and  distribution — determine  largely,  though 
not  entirely,  the  political,  social,  legal,  and  other  institu- 
tions and  relationships  of  society  in  any  given  period.  It 
has  been  widely  misrepresented  as  teaching  a  crass  ma- 
terialism which  declares  that  economic  conditions  are  the 
only  considerations  in  social  progress,  whereas  in  reality 
it  merely  states  that  economic  factors  are  the  most  im- 
portant determinants.  There  can  be  no  doubt,  however, 
that  adherents  of  socialism  are  so  impressed  with  the 
powerfulness  of  material  conditions  that  they  fail  to  take 
into  consideration  such  historical  forces'  as  religion,  law, 
ethics,  politics,  and  great  personalities. 

2.  The  Class  Struggle. — Socialist  thought  and  action  are 
dominated  by  the  concept  of  a  grim  struggle  between 
oppressors  and  oppressed.  Such  a  struggle  has  obtained 
throughout  the  evolution  of  society  and  to-day  the  contest 
is  between  the  wage-earning  class  and  the  capitalist  class. 
Master  and  slave,  lord  and  serf,  gild-master  and  journey- 

1  Socialism  in  Thought  and  Action,  p.  10. 


Socialism  577 

man,  employer  and  wage-earner — these  have  been  the 
warring  classes.  This  struggle,  the  socialists  believe,  will 
end  in  the  emancipation  of  the  proletarian  or  working 
class,  and  will  result  in  the  abolition  of  all  forms  of 
"exploitation,  oppression,  class  distinction,  and  class 
struggles."  This  theory  has  been  criticized  on  the 
grounds  that  the  history  of  civilization  cannot  be  ex- 
plained wholly  in  terms  of  class  conflict,  and  that  even 
in  it  present  structure  society  is  not  reducible  to  a  two- 
class  constituency.  The  socialists  recognize  the  presence 
of  a  middle  class  but  claim  that  this  one  will  disappear 
tinder  the  oppression  of  the  capitalists  and  will  eventually 
merge  with  the  proletarians.  The  doctrine  is  further 
objected  to  on  the  ground  that  it  breeds  class  hatred, 
but  this  the  socialists  deny. 

3.  The  Concentration  of  Cajjital. — Socialists  contend  that 
the  facts  of  economic  history  indicate  the  operation  of  a 
law  of  concentration  of  capital  under  the  operation  of 
which  private  property  tends  to  concentrate  in  fewer 
and  fewer  hands,  until  collective  enterprise  becomes  neces- 
sary and  inevitable.     The  growth  of  the  corporation,  of 
trusts,  and  laffge-scale  production  are  among  the  tenden- 
cies cited  in  support  of  this  theory.    In  every  country  the 
control  of  industry  is  being  vested  in  fewer  hands.    This 
concentration  appears  in  the  realms  of  finance,  commerce, 
transportation  and  communication,  and  manufacturing. 
Agriculture  is  still  dominated  by  small-scale  production, 
but  even  here  there  is  a  tendency  toward  concentration. 
It  should  be  noted,  however,  (1)  that  although  there  is 
increasing  concentration  of  control  in  industry  the  facts 
indicate  a  wide  distribution  of  ownership  through  stocks 
and  bonds  held  by  the  middle  and  wage-earning  classes, 
and  (2)  concentration  of  individual  control  does  not  mean 
necessarily  that  thin  development  will  culminate  in  col- 
lectivism. 

4.  Surplus  Labor  and  Surplu*  Value.— The  labor  theory 
of  value,  which  has  exercised  an  important  influence  over 
Marxian  economics,  states  that  the  exchange  value  of  a 
commodity   is   determined  by  the   quantity   of   socially. 


578  Socialism 

necessary  labor-power  embodied  therein.  In  other  words, 
the  quantity  of  human  effort  which  is  required  by  society 
to  replace  or  reproduce  a  commodity  is  the  final  deter- 
minant of  its  price  in  exchange.  Marx  recognized  what 
economists  call ' '  utility ' '  as  the  prominent  factor  in  ' '  sub- 
jective value"  or  "value  in  use,"  but  to  him  utility  was 
insufficient  to  explain  value  in  exchange,  that  is,  the 
power  of  goods  to  command  other  goods  in  exchange. 
The  latter  determination  can  be  explained  only  by  a  com- 
mon or  homogeneous  element,  and  this  element  is  the 
quantity  of  human  labor  contained  in  the  commodity.  Dif- 
ferences in  the  exchange  value  of  goods  are  accounted  for  by 
the  variations  in  the  amount  of  human  energy  socially  nec- 
essary to  produce  them.  Marx  was  convinced,  as  are  his 
disciples,  that  labor  normally  produces  more  than  it  is 
paid  in  commodities  for  its  maintenance.  For  example, 
in  a  ten-hour  day,  the  worker  is  said  to  produce  in  five 
hours  the  equivalent  of  his  remuneration,  and  during  the 
remaining  five  hours  is  laboring  for  nothing,  this  surplus 
being  expropriated  by  the  capitalist-employer.  These 
extra  hours  of  unremunerated  effort  are  "surplus  labor" 
and  the  value  which  the  goods  produced  in  that  time  com- 
mand in  exchange  is  "surplus  value." 

The  Marxian  theory  of  value  is  untenable  because  it 
really  disregards  the  fact  that  value  is  governed  by  com- 
petitive forces,  that  is,  by  demand  and  supply.  While 
labor  costs  are  involved  in  the  supply  side  of  value  deter- 
minations, the  quantity  of  labor  as  such  is  not  the  sole 
determinant.  No  matter  how  much  labor  is  embodied 
in  a  commodity  there  will  be  no  exchange  in  the  absence 
of  demand,  which  is  regulated  by  utility.  In  recent  years 
socialists  have  laid  less  emphasis  upon  the  theory  of  sur- 
plus value  as  an  essential  tenet  of  Marxism,  although  the 
communists  adhere  rigidly  to  it.  It  should  be  added, 
moreover,  that  practically  all  socialists  still  contend  that 
while  the  theory  of  surplus  value  is  probably  untenable, 
the  facts  of  surplus  labor  and  surplus  value  cannot  be 
denied. 

5.  The  Theory  of  Industrial  Crises. — Socialists  contend 


Socialism  579 

that  industrial  crises  and  financial  panics  are  evils  inherent 
in  capitalism.  •  The  causes  of  these  maladjustments  are 
found  in  the  deficiencies  of  the  present  system  of  ex- 
change, the  manufacturers'  ignorance  of  market  condi- 
tions, and,  above  all,  in  underconsumption  on  the  part  of 
the  working  class  which  is  said  to  produce  far  more  than 
it  can  repurchase  with  its  limited  income.  The  unequal 
distribution  of  wealth,  and  a  lack  of  coordination  of 
productive  and  distributive  forces  are  responsible  for 
periodic  industrial  crises  and  depressions.  This  theory 
has  been  criticized  on  the  ground  that  it  does  not  take 
into  consideration  the  fact  that  industrial  crises  may  re- 
sult as  much  from  overproduction  and  overexpansion  of 
credit  as  from  underconsumption.  Actually,  of  course, 
these  are  phases  of  the  same  phenomenon,  since  -over- 
production necessitates  credit  expansion  and,  per  se,  indi- 
cates the  absence  of  purchasing  power.  It  is  very  doubt- 
ful, however,  whether,  under  the  complex  structure  and 
functions  of  the  modern  economic  world,  even  socialism 
could  eliminate  crises. 

6.  Other  Theories. — Among  other  Marxian  doctrines  are 
the  disappearance  of  the  middle  class,  which  teaches  that 
under  the  increasing  concentration  of  capital  the  middle 
class  tends  to  disappear;  and  the  theory  of  increasing 
misery,  which  states  that  the  modern  wage-earner,  instead 
of  rising  socially  with  the  progress  of  industry,  sinks 
deeper  and  deeper  into  "misery,  slavery,  degradation,  ex- 
ploitation, and  pauperism."  Contemporary  socialists, 
discovering,  that  the  facts  indicate  a  general  improvement 
in  the  status  of  the  working  class,  are  inclined  to  admit 
that  the  worker  is  not  absolutely  but  relatively  worse 
off  than  he  was  prior  to  the  era  of  capitalism.  They 
contend  that  the  term  misery  must  be  given  a  psycholog- 
ical interpretation,  and  that  from  this  point  of  view  the 
worker  is  worse  off  because  of  constant  fear  resulting 
from  economic  insecurity,  the  diminishing  opportunity  for 
self-expression,  the  failure  of  income  to  keep  pace  with 
higher  standards  of  living,  and  the  concentration  of 
wealth  in  the  hands  of  a  few. 


580  Socialism 

The  Aims  of  Socialism. — The  limits  of  this  volume  do 
not  admit  of  a  comprehensive  presentation  of  the  aims 
of  socialism,  much  less  an  adequate  discussion  of  the  prob- 
able structural  and  functional  aspects  of  the  socialist  com- 
monwealth. Profiting  by  the  experiences  of  the  Utopians, 
socialists  have  generally  refused  to  picture  in  detail  the 
future  socialist  society.  In  recent  years,  however,  there 
has  been  a  revival  of  the  tendency  to  draw  up  constitu- 
tions of  future  socialist  commonwealths,  occasioned  prob- 
ably by  the  persistent  demands  of  the  critics  and  op- 
ponents of  socialism  for  a  definite  program  of  recon- 
struction. "Broadly  speaking,  the  socialist  movement 
aims  to  bring  about  a  condition  of  society  under  which 
equality  of  opportunity,  justice,  freedom,  democracy  and 
brotherhood  will  be  the  heritage  of  the  mass  of  man- 
kind."2 

Socialism  seeks  to  abolish  the  capitalistic  system  and 
to  establish  a  form  of  society  in  which  the  social  forces 
of  production  and  distribution  will  be  socially  owned  and 
controlled  in  the  interest  of  all  rather  than  for  a  privileged 
few.  It  has  been  suggested  that  many  communists  de- 
sire the  complete  abolition  of  private  property,  whereas 
the  political  socialists  or  collectivists  wish  to  socialize  only 
private  property  in  the  instruments  of  production  and 
exchange,  and  to  allow  private  property  in  consumption 
goods.  Thus  under  socialism  one  may  still  own  his  own 
home  and  other  personal  effects  that  cater  directly  to 
his  wants.  Speculation  in  agricultural  lands  will  be 
eliminated,  but  ownership  of  land  will  be  limited  only 
in  so  far  as  necessary  to  prevent  the  exploitation  of  one 
class  by  another.  The  wage  system  as  now  known  will 
be  abolished  and  industry  controlled  and  governed  by  and 
for  the  productive  workers.  Socialism  does  not  propose 
rigid  equality  of  income,  as  is  commonly  supposed.  In- 
come will  be  apportioned  not  according  to  needs,  as  sug- 
gested by  the  communists,  but  according  to  differences  in 
skill,  diligence,  and  merit.  All  forms  of  intellectual  and 
cultural  effort  are  to  be  encouraged  and  an  equal  oppor- 

*  Laidler,  op.  cit.,  p.  l&t 


Socialism  581 

tunity  given  to  all  to  develop  natural  abilities.  The  sys- 
tem of  money  and  exchange  will  probably  not  be  greatly, 
modified,  except  that  it  will  be  controlled  collectively. 
Although  communists  would  abolish  parliamentary  gov- 
ernment, the  collectivists  advocate  a  political  state  that 
shall  function,  not  as  an  instrument  of  coercion  but  as 
an  agency  for  the  promotion  of  the  general  welfare.  There 
is  no  reason  to  believe  that  constructive  socialists  intend 
to  destroy  religion;  each  individual  is  to  be  free  to  obey 
his  own  conscience  and  convictions.  It  does  not  appear, 
moreover,  that  socialism  proposes  to  destroy  the  home  and 
monogamic  relations. 

Objections  to  Socialism. — Ever  since  its  inception  social- 
ist philosophy  has  been  severely  criticized  by  those  who 
defend  the  present  social  order.  Many  objections  that 
were  formerly  urg'ed  against  socialism  have  been  dis- 
carded by  intelligent  critics.  Among  these  are:  (1) 
Socialism  would  lead  to  the  collective  ownership  of  all 
forms  of  private  property ;  (2)  socialism  would  mean  the 
confiscation  of  all  accumulated  wealth  and  capital;  (3) 
socialism  would  result  inevitably  in  the  collective  owner- 
ship of  the  home  and  the  nationalization  of  women  and 
children;  (4)  labor  checks  would  be  substituted  for 
money;  (5)  under  socialism  compulsory  assignment  of 
tasks  would  be  introduced;  (6)  the  social  demand  for 
commodities  could  not  be  anticipated;  and  (7)  giant  in- 
dustries could  not  be  managed  successfully.  The  social- 
ists' answers  to  the  first  four  of  these  objections  have 
been  suggested  already.  Modern  giant  corporations  and 
trusts  show  that  the  social  demand  for  commodities  is 
forecasted  and  that  national  industries  could  probably  be 
administered  successfully. 

Many  objections  to  socialism  are  still  advanced.  (1) 
A  state  of  socialism  would  endanger,  if  not  destroy,  in- 
dividual liberty.  Since  the  days  of  Herbert  Spencer,  many 
have  contended  that  "all  socialism  implies  slavery." 
Socialists  generally  assume  that  economic  relations  are  to 
be  regulated  by  some  central  authority,  which  may  mean 
the  establishment  of  a  powerful  bureaucracy  functioning 


582  Socialism 

to  limit  freedom  of  action.  There  is  always  a  real  danger 
of  the  extension  of  governmental  power  over  the  economic 
life  of  the  individual,  and  there  can  be  no  doubt  that 
this  danger  may  be  greatly  augmented  under  socialism. 
Socialists  contend,  however,  that  under  modern  capitalism 
individual  liberty  is  a  fiction,  since  industry  and  govern- 
ment are  controlled  in  the  interest  of  special  privilege. 
They  urge  that  under  socialism  greater  economic  security 
and  industrial  equality  will  be  assured,  and  that  the  state 
will  be  controlled  democratically  to  provide  the  fullest 
expression  of  individuality. 

(2)  Socialism  will  stifle  initiative  and  enterprise  by 
depriving  individuals  of  the  necessary  incentives  to  ac- 
tion. It  is  difficult  to  escape  the  conclusion  that  socialism 
would  tend  to  remove  the  stimulus  of  individual  initiative, 
self-interest,  and  productivity  which  the  relatively  free 
play  of  economic  motives  provides  to-day.  Socialists  urge 
that  the  altruistic  motive  is  as  powerful  as  the  motive 
of  self-interest.  There  is  no  assurance,  however,  that 
men  will  react  altruistically  under  socialism  any  more 
than  they  do  under  capitalism.  There  is  a  tendency  on 
the  part  of  socialists  to  advocate  a  commonwealth  in 
which  differences  in  individual  ability  and  achievements 
will  be  recognized.  It  is  a  matter  of  conjecture  whether, 
in  the  absence  of  bureaucratic  control,  this  would  result 
in  inequalities  of  economic  status  similar  to  those  that 
obtain  at  present.  (3)  Socialism  assumes  fallaciously  that 
certain  evils  of  the  present  order  will  disappear  when  a 
new  order  is  established.  The  abolition  of  private  prop- 
erty in  the  instruments  of  production  will  not,  per  se, 
lead  to  the  elimination  of  disease,  envy,  passion,  thrift- 
lessness,  idleness,  intemperance,  insubordination,  hatred, 
and  other  forms  of  physical  and  moral  degeneracy.  While 
socialists  do  not  claim  that  society  will  be  rid  of  all  its 
ills,  they  are  inclined  in  their  enthusiasm  to  believe  that 
a  sort  of  millennium  will  follow  the  introduction  of  collec- 
tivism. Socialism  will  not  make  men  moral  any  more 
than  does  capitalism  unless  it  can  succeed  in  removing 
all  of  the  causes  of  exploitation  and  self-indulgence. 


Socialism  583 

(4)  Socialism  will  decrease  efficiency  and  increase 
political  corruption.  It  is  contended  that  the  history  of 
government  ownership  has  demonstrated  the  inefficiency 
and  corruption  of  collective  enterprise.  Many  persons 
point  to  national  experiences  during  the  World  War  as 
examples  of  profligate  waste.  In  refutation  of  this  con- 
tention socialists  state  that  the  present  inefficiency  In 
public  industries  is  the  result  of  party  government 
dominated  by  corrupt  political  bossism  and  corporate  in- 
terests. It  is  a  debatable  question,  however,  whether  the 
delegation  of  authority  which  will  be  necessary  under 
socialism  will  result  in  freedom  from  corruption  and  ineffi- 
ciency. Moreover,  the  limited  experience  with  self-govern- 
ing workshops  indicates  that  failure  has  been  caused 
chiefly  by  the  refusal  of  the  workers  to  submit  to  dis- 
cipline. (5)  Price-fixing  under  socialism  would  be  an 
impossible  task.  Unless  socialism  can  evolve  some  scheme 
of  stabilizing  the  price  level,  serious  maladjustments  are 
bound  to  result,  as  under  the  present  operation  of  the 
law  of  supply  and  demand.  Arbitrary  price  determina- 
tion under  Russian  bolshevism  does  not  appear  to  have 
been  successful.  The  socialists  claim  that  they  will  follow 
expediency  in  this  matter,  and  are  concerned  with  ad- 
justing prices  in  accordance  with  the  desires  of  the  com- 
munity to  increase  or  decrease  production.  If  they  intend 
to  control  and  not  to  ignore  the  law  of  supply  and  demand, 
price  regulation  may  prove  practicable,  since  that  is  just 
what  happens  often  under  capitalism.  Classical  economics 
denies  the  feasibility  of  such  arbitrary  action. 

(6)  Socialism  will  result  in  the  evil  of  overpopulation, 
since  the  restraints  which  present  economic  conditions 
impose  on  reproduction  will  be  removed  under  an  eco- 
nomic system  that  apportions  income  according  to  needs. 
Distribution  according  to  needs  is  not  the  aim  of  moderate 
socialism,  but  of  communism.  Another  reason  for  this  ob- 
jection against  socialism  is  that  parental  responsibility  will 
be  lessened,  since  the  state  will  take  care  of  the  children. 
Socialists  claim,  however,  that  under  the  higher  standards 
of  living  which  they  propose,  the  greater  moral  responsibility 


584  Socialism 

of  parents,  coupled  with  a  more  effective  public  opinion, 
will  remove  all  serious  danger  of  overpopulation.  (7)  So- 
cialism will  lead  to  anarchism.  Anarchism  and  socialism 
are  opposite  rather  than  identical  types  of  philosophy,  so 
that  this  objection  when  applied  to  political  socialism  has 
really  no  foundation.  The  abolition  of  the  political  state  is 
advocated  by  communists,  and  this  is  a  presumption  in 
favor  of  anarchism.  Communism  accepts  the  unlimited 
dictatorship  of  the  proletariat  during  the  transition  from 
capitalism  to  communism,  but  beyond  that  all  political 
government  of  persons  is  to  cease. 

The  Growth  of  Socialism. — In  almost  every  important 
industrial  nation  socialism  has  made  considerable  progress 
in  recent  years,  Its  growth  has  been  particularly  rapid 
since  the  World  War.  Prior  to  1914  the  socialist  vote 
in  the  countries  in  which  the  movement  was  definitely 
organized  numbered  into  the  millions.  In  1912,  the  num- 
ber of  socialists  in  the  German  Reichstag  was  110,  while 
there  were  4,250,329  votes,  or  34  per  cent  of  the  vote  for 
the  entire  country,  cast  for  the  socialist  group  in  that 
year.  There  were  101  socialist  representatives  in  the 
French  Chamber  of  Deputies  in  1914,  and  one-sixth  of 
the  total  votes  cast  in  the  national  election  for  that  year 
were  secured  by  the  socialists.  The  socialist  vote  in  the 
United  States  in  1912  was  901,000.  Similar  growth  is 
recorded  for  other  countries.  Upon  the  outbreak  of  the 
war  there  was  a  lull  in  the  movement,  because  many, 
socialists  supported  their  respective  national  governments. 
The  Russian  Revolution  in  1917,  and  the  successful  coup 
d'etat  of  the  bolsheviks,  was  a  signal  for  the  remarshal- 
ing  of  socialist  forces  in  every  country.  Monarchies  fell 
rapidly;  the  rulers  of  at  least  twelve  Buropean  states 
gave  way  to  democratic  forces.  In  many  countries,  col- 
lectivism and  communism  succeeded  czarism  and  monarch- 
ism.  Thus,  guided  by  N.  Lenin  and  Leon  Trotzky,  Russia 
was  brought  under  the  control  of  communism  and  has 
remained  under  the  proletarian  dictatorship;  early  in 
1919  the  communist  forces  led  by  Bela  Kun  assumed  tem- 
porary control  of  the  government  of  Hungary;  and,  fol- 


Socialism  585 

lowing  the  abdication  of  the  Kaiser,  in  1918,  communists 
were  active  in  Germany.  Similar  changes  took  place 
in  other  countries,  and  for  a  time  socialism  and  commun- 
ism threatened  to  realize  the  long-desired  world  pro- 
letarian revolution.  Individualistic  countries,  as  the 
United  States  and  Great  Britain,  did  not  escape  the  spread 
of  revolutionary  activities.  Even  conservative  China  and 
Japan  now  have  socialist  movements,  to  say  nothing  of 
other  oriental  countries.  The  strength  of  the  world  social- 
ist movement  to-day  cannot  be  stated  in  figures,  but  even 
the  most  casual  observation  will  show  that  it  is  greater 
than  at  any  other  time  in  the  world's  history. 

Reasons  for  the  Growth  of  Socialism. — There  are  several 
reasons  for  the  growth  of  socialism  throughout  the  world. 

1.  The  Unreasonable  and  Unfounded  Belief  in  the  Effi- 
cacy of  Economic  Laws. — Ever  since  the  publication  of  Adam 
Smith's  "Wealth  of  Nations,"  in  1776,  there  has  been  an 
unwarranted  faith  in  the  power  of  the  free  play  of  economic 
forces  to  assure  social  justice  and  safeguard  the  common 
welfare.    Disillusionment  soon  followed  the  extreme  em- 
phasis on  the  virtues  of  laissez-faire,  or  unrestrained  in- 
dividualism, and  a  working-class  revolt  was  inevitable. 
The  masses  turned  to  reform  movements,  and  found  in 
organized   collective   bargaining,    labor   legislation,   and 
socialism  greater  promise  of  protection  than  unregulated 
industry  had  afforded  them. 

2.  The  Broader  Conception  and  Interpretation  of  the 
Powers  of  the  State. — The  evils  and  abuses  of  modern  in- 
dustrialism have  been  a  potent  factor  in  the  development 
of  a  new  conception  of  the  functions  of  government.  Even 
in  the  most  individualistic  countries  it  is  now  generally  held 
by  the  courts  that  the  police  or  regulatory  powers  of  the 
state  may  be  logically  and  justly  exercised  in  protecting 
the  weak  against  the  strong,  and  in  safeguarding  the  com- 
mon welfare,  although  this  extension  of  authority  limits  and 
abridges  the  rights  of  individuals.    Modern  social  legisla- 
tion, which  is  generally  viewed  as  a  phase  of  state  socialism, 
is  sustained  by  the  doctrine  of  the  police  power  of  the  state. 

3.  Tho  Earnest  Devotion  of  the  Leaders  and  Disciples 


586  Socialism 

of  Socialism. — Persecution  and  imprisonment  for  opposi- 
tion to  militarism,  war  and  the  evils  of  capitalism  generally, 
have  not  destroyed  their  faith  in  the  ultimate  triumph  of 
socialism. 

4.  The  Constructive  Influence  of  Socialism. — Many  per- 
sons have  affiliated  themselves  with  the  socialist  movement, 
because  they  have  seen  in  its  program  and  activities  an 
emphasis  upon  the  human,  as  distinct  from  the  material 
and  mechanical,  factors  in  production  and  distribution.  In 
calling  attention  to  the  evils  and  deficiencies  of  the  present 
social  and  industrial  order,  and  in  marshaling  the  working 
classes  in  revolt  against  these  conditions,  socialism  has  done 
a  notable  service.  Governments  and  private  employers  have 
introduced  many  reforms  originally  advocated  by  the  social- 
ists, and  the  present  strong  tendencies  towards  democratic 
government,  as  well  as  the  equally  important  step  towards 
industrial  democracy,  are  in  no  small  measure  the  result 
of  socialist  agitation.  Individualistic  industrialism  is 
giving  place  to  social  industrialism,  and  political  govern- 
ment is  passing  rapidly  into  the  hands  of  the  governed. 
Socialism  has  not  been  the  only  force  that  has  promoted 
these  momentous  changes,  but  it  has  been  one  of  the 
important  forces. 

Recent  Developments  in  the  United  States. — The  social- 
ist movement  in  the  United  States  during  the  Great  War 
was  concerned  chiefly  with  relentless  opposition  and  the 
securing  of  an  early  peace.  The  socialist  vote  in  the  presi- 
dential election  of  1916  was  only  590,294,  as  compared 
with  approximately  900,000  in  1912.  In  1920,  Eugene  V. 
Debs  received  less  than  1,000,000  votes  out  of  about  28,- 
000,000,  a  relatively  lower  vote  than  in  1912.  This  diminu- 
tion in  the  socialist  vote  may  be  attributed  partly  to 
disruption  within  the  movement  itself,  and  partly  to  the 
fact  that  the  communists  have  practically  tabooed  the 
exercise  of  suffrage  under  capitalism.  In  September,  1919, 
the  American  socialist  movement  split  into  three  distinct 
groups,  the  opportunist  right  wing  remaining  in  control 
of  the  Socialist  Party,  the  ultra-revolutionary  left  wing 
forming  the  Communist  Party,  and  the  center-left,  whose 


Socialism  587 

policy  was  uncertain  and  indefinite,  organizing  the  Com- 
munist Labor  Party. 

Generally  speaking,  the  reorganization  in  American 
socialist  forces  was  the  result  of  the  refusal  of  the  right- 
wing  faction  to  abandon  its  program  of  opportunistic 
political,  social,  and  economic  reforms,  and  the  demands 
of  the  ultra-revolutionary  and  vacillating  left  factions  for 
an  extremist  platform  seeking  the  immediate  demolition 
of  capitalism  and  the  establishment  of  a  proletarian  dic- 
tatorship. The  schism  in  European  socialism  which  drove 
political  socialists  to  reaffirm  their  allegiance  to  the 
Second  International  and  the  communists  to  the  Third 
International,  precipitated  the  crisis  in  American  social- 
ism. The  Socialist  Party  still  adheres  to  its  program 
of  political  and  economic  reform,  while  the  communists 
who  have  joined  forces  in  the  United  Communist  Party 
denounce  such  reforms  and  place  no  confidence  in  political 
action.  In  December,  1921,  many  communist  federations 
among  the  foreign-born  united  to  form  the  Workers  Party 
of  America.  In  the  fall  of  1921  the  League  for  Industrial 
Democracy  was  organized,  as  the  successor  to  the  Inter- 
collegiate Socialist  Society,  its  purpose  being,  "education 
for  a  new  social  order  based  on  protection  for  public  use 
and  not  for  private  profit." 

The  program  of  revolutionary  communism  in  the 
United  States  may  be  summarized  briefly  as  follows:  (1) 
complete  disruption  of  the  capitalist  state  and  the  elimina- 
tion of  every  vestige  of  bourgeois  parliaments;  (2)  organ- 
ization of  a  dictatorship  of  the  proletariat  as  the  initial 
step  in  the  communist  reconstruction  of  the  social  order, 
subsequent  to  the  anticipated  successful  social  revolution ; 
(3)  participation  in  political  campaigns  under  capitalism 
to  be  of  secondary  importance,  devoted  only  to  the  task 
of  disseminating  communist  propaganda  against  the 
bourgeois  state ;  (4)  nominations  for  public  office  and  par- 
ticipation in  elections  limited  to  legislative  bodies,  as 
municipal  councils,  state  legislatures,  and  Congress;  (5) 
no  introduction  or  support  of  political  and  social  reform 
measures  by  communist  representatives,  but  the  use  of 


588  Socialism 

parliamentary  powers  and  privileges  in  exposing  capital- 
istic oppression  of  the  proletariat;  (6)  absolute  main- 
tenance of  the  revolutionary  class  struggle  and  no 
compromise  or  cooperation  with  political  groups  not  com- 
mitted definitely  and  openly  to  that  struggle,  as  the  Social- 
ist Party,  labor  parties,  the  Non-Partisan  League,  and 
municipal  ownership  leagues;  (7)  major  activities  of  the 
communist  parties  to  be  carried  on  in  the  industrial  strug- 
gles, in  order  to  develop  a  general  understanding  of  the 
strike  in  relation  to  the  final  overthrow  of  capitalism,  that 
is,  to  emphasize  the  revolutionary  implications  of  the  mass 
strike  rather  than  the  immediate  purposes  of  the  local 
walkout;  (8)  the  organization  and  support  of  industrial 
unionism  instead  of  the  reactionary  craft  unionism  of  the 
'American  Federation  of  Labor;  (9)  cooperation  with  the 
revolutionary  proletariat  of  the  world  in  order  to 
guarantee  the  success  of  the  Communist  International  and 
pave  the  way  for  the  introduction  of  world  communism 
comprised  of  free,  coordinated,  cooperating,  communistic 
societies. 

Tendencies  Toward  Socialism. — There  are  many  move- 
ments which  may  not  be  correctly  described  as  socialism 
but  which  are  regarded  both  by  socialists  and  by  their 
opponents  as  distinctly  socialistic  in  character.  It  is  be- 
lieved that  these  tendencies  are  preparing  the  way  for  the 
transition  from  capitalism  to  socialism,  if,  indeed,  they 
do  not  themselves  form  a  part  of  that  transition.  In  the 
category  of  these  movements  are  usually  included  the 
growth  of  corporations  and  trusts,  social  legislation, 
the  cooperative  movement,  public  ownership  of  public 
utilities,  the  labor  movement,  and  the  democratization  of 
industry  through  shop  committees  and  industrial  councils. 
Communists  find  little  comfort  in  these  reforms,  and 
contend  that  they  retard  rather  than  advance  the  cause 
of  true  socialism,  since  they  tend  to  reconcile  the  pro- 
letariat to  modified  capitalism.  The  collectivists,  however, 
are  greatly  encouraged  by  these  tendencies. 

Socialists  see  in  the  modern  giant  corporation  and  trust 
a  practical  demonstration  of  the  possibilities,  economies, 


Socialism  589 

and  efficiencies  of  collectively  owned  and  operated  indus- 
tries. They  claim  that  the  increasing  integration  of  in- 
dustry and  concentration  of  control  which  corporate  or- 
ganization introduces  will  make  it  comparatively  easy  to 
expropriate  the  capitalists  and  so  effect  the  transition 
from  capitalism  to  socialism.  Moreover,  monopolistic  con- 
trol of  prices,  and  political  corruption  practiced  by  cor- 
porations will  create  a  spirit  of  revolt  and  solidarity 
among  producers  and  consumers  which  will  lead  to  a 
demand  for  collective  ownership  and  control.  Many 
socialists  regard  social  legislation  as  a  definite  movement 
toward  collectivism.  While  many  socialists  fear  that  these 
reforms  placate  the  workers,  an  increasing  number  believe 
that  they  destroy  the  defenses  of  the  capitalist,  create  a 
desire  for  further  social  regulation  and  control,  improve 
the  physical  and  intellectual  status  of  the  workers,  and 
encourage  them  to  engage  more  actively  in  the  work  of 
social  reorganization. 

In  cooperation  the  socialists  discover  a  very  powerful 
movement  towards  collective  ownership  and  management 
of  the  production,  distribution,  and  exchange  of  wealth. 
The  ultimate  goal  of  true  cooperation,  it  will  be  remem- 
bered, is  the  realization  of  a  cooperative  commonwealth. 
A  further  movement  toward  socialism  is  found  in  the 
growth  of  public  ownership  of  such  public  utilities  as  the 
means  of  transportation,  communication,  education,  and 
natural  resources.  In  many  countries  the  railway,  tele- 
phone, and  telegraph  systems  have  been  taken  over  by 
the  government,  and  in  every  country  the  postal  service 
is  a  public  industry.  Education,  of  course,  is  now  essen- 
tially a  public  function. 

Socialists  deplore  the  tendency  of  craft  unions  to  split 
the  workers'  movement  into  fragments,  and  encourage  the 
replacement  of  craft  unionism  by  industrial  unionism 
having  a  distinctly  radical  aim.  The  recent  movement 
for  the  democratization  of  industry  is  in  keeping  with 
the  socialist  program,  and  will  educate  the  workers  for 
the  assumption  of  industrial  government  under  socialism. 
Although  all  these  tendencies  introduce  a  larger  measure 


590  Socialism 

of  collective  control  over  industrial  and  social  life,  the 
socialists  indulge  in  an  excessive  optimism  when  they 
believe  that  these  things  will  lead  inevitably  to  complete 
collectivism. 

Conclusions. — Socialism  has  not  been  applied  sufficiently 
to  warrant  dogmatic  assertions  concerning  its  power  to 
solve  the  many  labor  problems  that  have  developed  under 
capitalism.  The  Utopian  experiments  of  the  early  nine- 
teenth century  were  total  failures,  but  such  communities 
are  not  proposed  by  Marxian  socialism.  Even  the  experi- 
ences with  communism  in  Russia  and  Hungary,  and  with 
more  moderate  socialism  in  Czechoslovakia  and  other 
countries,  do  not  furnish  adequate  information.  Concern- 
ing the  success  of  these  experiments  moderate  socialists, 
revolutionary  communists,  and  antisocialists  tell  such  con- 
flicting stories  that  the  evidence  is  unreliable.  In  so  far 
as  one  may  conjecture,  however,  there  is  little  reason  to 
believe  that  socialism  in  any  form  gives  much  promise  of 
success.  Before  rational  individuals  will  consent  to  the 
destruction  of  the  present  order,  which  has  been  built 
up  through  centuries  of  effort  and  has  brought  to  man- 
kind greater  benefits  than  it  hitherto  enjoyed,  socialists 
will  have  to  prove  conclusively  that  such  problems  as  the 
furnishing  of  adequate  incentives  to  enterprise,  industrial 
discipline,  law  and  order,  apportionment  of  tasks  and 
occupations,  just  recognition  of  differences  in  ability  and 
equitable  distribution  of  rewards,  the  employment  of  the 
shiftless  and  lazy,  protection  against  a  despotic  bureau- 
cracy, and  the  correlation  of  international  trade  relations, 
can  be  solved  successfully  under  collectivism.  In  all 
probability  the  wage-earning  classes  will  continue  to  re- 
ceive greater  benefits  from  an  improved  and  controlled 
capitalism  than  would  accrue  to  them  from  socialism. 


Socialism  591 


SELECTED  REFERENCES 

BOUCKE,  0.  F.,  The  Limits  of  Socialism,  1920. 

BRASOL,  B.  L.,  Socialism  v.  Civilization,  1920. 

CLARK,  J.  B.,  Social  Justice  without  Socialism,  1914. 

COLE,  G.  D.  H.,  Labor  in  the  Commonwealth,  1919. 

COLE,  G.  D.  H.,  Self -Government  in  Industry,  1918. 

COLE,  G.  D.  H.,  Guild  Socialism,  1920. 

GIDE,  CHARLES,  AND  RIST,  CHARLES,  A  History  of  Economic  Doc- 
trines, 1915. 

HEWES,  AMY,  Guild  Socialism:  A  Two  Years'  Test,  Amer.  Econ. 
Rev.  12:209-237,  June,  1922. 

HILLQUIT,  MORRIS,  From  Marx  to  Lenin,  1921. 

HILLQUIT,  MORRIS,  Socialism  in  Theory  and  Practice,  1909. 

HOBSON,  J.  A.,  The  Industrial  System,  1910,  Chap.  XIV. 

HOBSON,  S.  G.,  National  Guilds  and  the  State,  1920. 

LAIDLER,  H.  W.,  Socialism  in  Thought  and  Action,  1920. 

LEROSSIGNOL,  J.  E.,  What  Is  Socialism?,  1921. 

MKLVIN,  F.  J.,  Socialism  as  the  Sociological  Ideal,  1915. 

RECKITT,  M.  B.,  AND  BECHHOFER,  C.  E.,  The  Meaning  of  National 
Guilds,  1918. 

RUSSELL,  BERTRAND,  Bolshevik  Theory,  1921. 

RUSSELL,  BERTRAND,  Bolshevism:  Theory  and  Practice,  1920. 

RUSSELL,  BERTRAND,  Proposed  Roads  to  Freedom,  1919. 

SPARGO,  JOHN,  Social  Democracy  Explained,  1918. 

WATKINS,  G.  SM  The  Present  Status  of  Socialism  in  the  United 
States,  Atlantic  Monthly,  124:821-830,  Dec.,  1919. 

WATKINS,  G.  S.,  Revolutionary  Communism  in  the  United  States, 
Amer.  Pol.  Sci.  Review,  14:14-33,  Feb.,  1920. 


CHAPTER  XXV 
LABOR  LEGISLATION 

The  Functions  of  Law  in  Relation  to  Labor.— The  func- 
tions of  law  in  relation  to  labor  may  be  summed  up  in 
the  words  protection  and  improvement.  Three  reasons 
may  be  assigned  for  the  enactment  of  laws  designed  to 
protect  and  improve  the  status  of  wage-earners  in  indus- 
try: (1)  the  prevalence  of  self-interest  as  the  dominant 
motive  of  economic  activity,  which  often  results  in  the 
exploitation  of  defenseless  workers  by  avaricious  employ- 
ers; (2)  the  complexity  of  modern  industrial  organization 
and  operation,  which  makes  it  practically  impossible,  ex- 
cept under  the  compulsion  of  law,  for  even  well-meaning 
and  scrupulous  employers  to  safeguard  the  physical,  men- 
tal, and  economic  interests  of  their  employees;  and  (3) 
the  necessary  relationship  that  obtains  between  the  pro- 
tection and  improvement  of  standards  of  employment,  on 
the  one  hand,  and  social  welfare  and  progress,  on  the 
other. 

The  Development  of  Labor  Legislation. — 1.  England. — 
The  legal  status  of  the  laboring  classes  in  England,  as 
in  other  European  countries,  during  the  medieval  period 
was  definitely  fixed.  The  workers  found  themselves  en- 
compassed with  legal  regulations  concerning  wages,  hours 
of  work,  apprenticeship,  migration  from  one  locality  to 
another,  and  various  other  aspects  of  their  working  life. 
Combinations  of  laborers  for  the  purpose  of  changing 
conditions  of  employment  were  prohibited.  Many  of  these 
measures  were  ineffective  because  of  lax  enforcement. 
The  revolutionary  changes  that  were  taking  place  in  the 
eighteenth  century  made  the  prevailing  system  of  regula- 
tion burdensome  to  the  rising  class  of  capitalist-employers, 
as  it  had  been  from  time  to  time  to  the  laborers.  Free 

592 


Labor  Legislation  593 

access  to  the  labor  market  and  the  abolition  of  extended 
periods  of  apprenticeship  were  desired  because  the  new 
machines  could  be  operated  by  women  and  children.  In- 
spired by  the  teachings  of  Adam  Smith  concerning  free- 
dom of  economic  activity,  the  manufacturers  made  suc- 
cessful attacks  on  statutory  limitations.  Freedom  of  ac- 
tion became  the  shibboleth  of  the  nation  and  the  restric- 
tive laws  were  repealed. 

The  abolition  of  mercantilistic  restrictions  on  industry 
and  trade,  and  the  consequent  free  play  of  economic  forces 
under  the  sanction  of  ladssez-faire  philosophy  brought  new 
problems  and  new  evils  no  less  serious  than  the  old.  Tech- 
nical improvements  and  increased  production  were  secured 
at  the  expense  of  the  physical  and  mental  well-being  of 
the  men,  women,  and  children  who  worked  excessive  hours 
under  unfavorable  conditions.  New  regulations,  there- 
fore, had  to  be  prescribed  by  law.  Robert  Owen  and  some 
other  employers  of  labor  regarded  themselves  as  the  trus- 
tees of  the  interests  of  those  whom  they  employed  in  their 
factories,  and  aided  greatly  in  the  movement  for  reform. 
Social  and  moral  motives,  rather  than  any  conception  of 
the  economic  waste  of  child  labor  and  other  evils,  led 
to  the  demand  for  protective  laws;  there  was  no  appeal 
to  the  facts  concerning  the  relation  of  hours  and  condi- 
tions to  output.  The  agitation  of  Robert  Peel  and  Robert 
Owen  resulted  in  the  Health  and  Morals  Act  to  Regulate 
the  Labor  of  Bound  Children  in  Cotton  Factories,  in  1802. 
Children  who  were  not  pauper  apprentices  were  protected 
by  the  second  of  the  Factory  Acts,  enacted  in  1819.  In 
1833  all  textile  mills  were  brought  under  regulation.  This 
measure  prohibited  the  employment  of  children  under 
9  years  of  age;  children  between  the  ages  of  9  and  13 
might  work  only  8  hours  a  day,  and  young  persons  be- 
tween 13  and  18  years  of  age  for  only  12  hours,  with 
no  employment  at  night.  Provisions  were  made  for 
holidays  and  a  certificate  of  fitness  was  demanded.  Special 
factory  inspectors  were  appointed  to  enforce  the  act.  The 
Children's  Half-time  Act  of  1844  provided  for  the  safe- 
guarding of  machinery,  accident  reports,  public  prosecu- 


594  Labor  Legislation 

tion  to  gain  damages  in  cases  of  accidents,  and  the  em- 
ployment of  children  for  half-time  only,  the  other  half 
to  be  spent  in  school.  Under  this  act  all  women  workers 
were  classified  with  young  persons  13  to  18  years  of  age, 
for  the  purposes  of  restricting  their  hours  to  12  a  day 
and  prohibiting  their  employment  at  night.  The  Ten- 
Hour  Act  of  1847  secured  the  10-hour  day  for  women 
and  young  persons. 

But  all  these  measures  failed  to  reach  the  thousands 
of  women  and  children  who  worked  in  the  mines.  Chil- 
dren began  their  life  in  the  coal  mines  at  5,  6,  or  7  years 
of  age ;  girls  and  women  worked  like  boys  and  men ;  and 
the  hours  were  12  or  14  in  every  24,  often  at  night.  The 
Mines  and  Collieries  Act  of  1842  was  enacted  to  prohibit 
the  employment  of  women,  and  children  under  10  years 
of  age,  in  underground  mines.  The  law  was  revised  to 
exclude  from  such  employment  all  females  and  all  boys 
under  13  years  of  age.  Moreover,  the  factory  acts  were 
extended  to  all  large  industries  in  1864,  and  to  smaller 
workshops  in  1867.  In  1878  the  Factory  and  Workshop 
Consolidation  Act  repealed  all  former  laws  and  substi- 
tuted a  factory  code  which  made  regulations  more 
stringent.  Since  that  time  protection  has  been  extended 
to  workers  in  laundries,  docks,  sweatshops,  mercantile 
establishments,  and  other  enterprises.  The  new  factory 
code  of  1902  raised  the  minimum  age  for  child  workers 
from  11  to  12  years,  and  in  1920  the  Employment  of 
Women,  Young  Persons  and  Children  Act  was  passed  gov- 
erning the  employment  of  women  and  young  people  on 
the  two-day  shift  system,  excluding  from  industrial  em- 
ployment children  under  14  years  of  age,  and  permitting 
women,  and  young  persons  16  years  of  age  and  over,  to 
be  employed,  under  certain  conditions,  in  shifts  averaging 
not  more  than  8  hours  a  day,  at  any  time  between  6  a.m. 
and  10  p.m.,  or  6  a.m.  and  2  p.m.  on  Saturdays.  Work- 
men's compensation,  sickness  insurance,  unemployment 
insurance,  old  age  pensions,  and  many  other  protective 
measures  have  been  enacted  by  Great  Britain  in  behalf  of 
the  workers  and  social  welfare. 


Labor  Legislation  595 

2.  United  States. — Tenacious  individualism,  profound  re- 
gard for  common  law  principles,  and  strict  interpretation 
of  constitutional  provisions  have  united  to  retard  the 
development  of  labor  legislation  in  the  United  States.  The 
laws  that  have  been  passed  lack  uniformity  and  standard- 
ization because  of  the  existence  of  forty-eight  states.  In 
the  second  quarter  of  the  nineteenth  century  laws  were 
passed  in  the  various  states  providing  for  the  abolition 
of  imprisonment  for  debt,  mechanics'  prior  lien  for  the 
payment  of  wages,  free  schools,  and  protection  of  women 
and  children.  In  1836  Massachusetts  passed  a  law  for 
the  instruction  of  youths  in  factories,  and  in  1849  Penn- 
sylvania enacted  a  10-hour  measure  for  women  and  chil- 
dren in  certain  industries.  Massachusetts  assumed  a  posi- 
tion of  leadership  among  the  states  for  protective  legisla- 
tion. In  1866  it  passed  a  child  labor  law,  in  1869  a  labor 
bureau  was  established,  in  1874  a  10-hour  law  for  women 
and  for  young  persons  under  18  years  of  age  in  manufac- 
turing establishments  was  enacted,  and  in  1877  legal 
provision  was  made  for  the  inspection  of  factories.  The 
progress  of  labor  legislation  in  this  country  is  discussed 
in  the  remainder  of  this  chapter. 

Legal  Protection  of  Children. — 1.  State  Legislation. — 
In  the  United  States,  as  in  England,  children  became  the 
first  objects  of  protective  legislation.  Provisions  concern- 
ing the  instruction  of  children  in  manufacturing  establish- 
ments were  embodied  in  a  law  in  Massachusetts  in  1836 
and  this  was  followed  by  a  law  in  1842  which  introduced 
a  maximum  Of  10  hours  of  work  for  children  under  12 
years  of  age.  Connecticut  passed  a  law  in  1842  prescrib- 
ing a  maximum  of  10  hours  of  labor  for  children  under 
14  years  of  age  in  cotton  and  woolen  mills.  During  the 
next  two  decades  similar  measures  were  passed  in  New 
Hampshire,  Maine,  New  Jersey,  Ohio,  and  Pennsylvania. 
In  1853  Rhode  Island  enacted  an  11-hour  law  for  children 
between  the  ages  of  12  and  15.  The  hours  of  labor  for 
children  in  Connecticut  were  increased  later  to  11  and  12, 
respectively.  The  reasons  for  these  early  protective 
measures  in  the  case  of  children  were:  (1)  provision  of 


596  Labor  Legislation 

educational  opportunities  for  those  employed  in  industry ; 
(2)  the  protection  of  moral  and  religious  training;  (3) 
the  prevention  of  disastrous  competition  with  adult  work- 
ers; and  (4)  the  protection  of  the  health  of  the  children 
from  the  evil  effects  of  excessive  hours  and  bad  conditions 
of  labor.  In  some  of  the  states  only  the  textile  mills 
came  under  regulation,  while  in  others  all  manufacturing 
establishments  were  covered.  Because  of  the  vagueness 
of  their  provisions  these  early  statutes  remained  prac- 
tically unenforceable.  In  1866  Massachusetts  passed  an 
improved  type  of  child  labor  law  which  prohibited  the 
employment  of  children  under  10  years  of  age  in  manu- 
facturing establishments,  required  three  months'  school- 
ing each  year  for  child  workers  between  the  ages  of 
10  and  15,  specified  a  maximum  of  60  hours  of  labor  a 
week  for  children  under  15  years  of  age  in  any  manu- 
facturing establishment,  and  provided  for  inspection, 
annual  reports,  and  penalties  for  violation. 

The  movement  for  legal  protection  of  child  workers 
in  the  United  States  has  made  its  greatest  strides  during 
the  last  few  decades.  In  1903  Illinois  introduced  the 
8-hour  day  for  children  under  16  years  of  age.  Since 
that  time  the  progress  of  the  various  states  has  been 
rapid.  All  of  the  forty-eight  states,  the  District  of  Colum- 
bia, Alaska,  Hawaii,  and  Porto  Rico  have  enacted  legis- 
lation. No  uniformity  exists  in  the  state  laws  governing 
the  employment  of  children.  Certain  general  provisions, 
however,  characterize  these  laws,  such  as  the  requirement 
of  a  minimum  age  limit  for  employed  children ;  limitation 
of  hours  of  work  to  a  specified  maximum  per  day  and 
per  week;  prohibition  of  night  work;  regulation  of  the 
issuance  of  employment  certificates;  compulsory  school  at- 
tendance; provisions  for  administrative  machinery;  and 
punishment  for  violation. 

The  minimum  age  prescribed  for  the  employment  of 
children  in  factories,  canneries,  and  mercantile  establish- 
ments is  generally  14  years,  but  there  are  numerous 
exceptions  and  exemptions.  Exemptions  from  the  appli- 
cation of  the  legally  prescribed  minimum  are  allowed 


Labor  Legislation  597 

mainly  on  the  basis  of  relationship  of  the  child  to  the 
employer,  the  type  of  occupation,  the  hours  of  work  in 
relation  to  school  attendance,  emergencies,  and  poverty. 
For  one  or  another  of  these  reasons  the  minimum  is  in 
many  cases  reduced  to  10  or  12  years.  In  many  instances 
the  kind  of  occupation  allowed  is  specified.  Where  occu- 
pations are  deemed  hazardous  or  likely  to  have  serious 
effect  on  morals,  the  minimum  age  limit  is  ordinarily 
placed  higher.  On  January  1,  1921,  the  minimum  age 
for  employment  of  boys  in  mines,  quarries,  or  coal  break- 
ers was  16  in  twenty-six  states,  14  in  ten,  15  in  two,  17 
in  one,  and  18  in  four.  In  the  remaining  states  there 
were  no  specific  legal  regulations  governing  the  employ- 
ment of  children  in  these  occupations,  the  minimum  pre- 
scribed for  other  occupations  being  generally  applicable. 
Children  are  permitted  to  work  10  hours  a  day  and  60 
hours  a  week  in  Louisiana  and  South  Dakota,  while  in 
North  Carolina  and  South  Carolina  the  11-hour  day  and 
60-hour  week  are  permitted. 

Night  work  for  children  under  16  years  of  age  in  any 
gainful  occupation  is  prohibited  in  sixteen  states,  except 
that  in  Missouri  the  provision  does  not  apply  to  children 
working  for  their  parents  or  guardian,  and  in  Louisiana 
stores  and  mercantile  establishments  employing  more  than 
five  persons  are  exempted  on  Saturday  nights.  In  the 
laws  of  twenty-five  states  and  the  District  of  Columbia 
provisions  against  night  work  are  limited  to  factories, 
stores,  and  certain  other  occupations.  In  Georgia,  the 
prohibition  applies  only  to  children  under  14%  years  of 
age  employed  in  factories.  There  are  no  limitations  on 
night  work  for  children  under  16  years  of  age  in  Nevada, 
New  Mexico,  South  Dakota,  Texas,  Utah,  and  Wyoming. 
Where  night  work  is  prohibited  the  hours  between  which 
work  cannot  be  done  are  usually  from  6  or  7  p.m.  to 
6  or  7  a.m.,  but  there  are  variations  and  in  some  cases 
the  prohibited  hours  are  9  or  10  p.m.  to  5  or  7  a.m.1 

2.  Federal  Legislation. — The  lack  of  uniformity  in  itate 
laws  governing  the  employment  of  children  has  been 

» U.  8.  Children 's  Bureau,  State  Labor  Standards,  January,  1921. 


598  Labor  Legislation 

criticized  severely.  Opponents  of  state  legislation  have 
contended  that  certain  industries  in  states  having  pro- 
gressive child  labor  laws  inevitably  suffer  in  competition 
with  manufacturers  producing  goods  in  states  either 
where  there  are  no  statutory  limitations  or  where  the 
law  is  not  enforced.  Education  and  publicity  are  doing 
much  to  introduce  the  desired  uniformity,  but  this  method 
of  reform  is  necessarily  slow.  Backward  states  are 
reluctant  to  adopt  progressive  measures,  on  the  grounds 
that  they  do  not  wish  to  discourage  the  development  of 
new  industries  nor  drive  from  their  boundaries  those  that 
have  been  developed.  The  only  alternative,  there- 
fore, would  seem  to  be  the  enactment  of  a  federal  law. 
The  convenience,  economy,  and  effectiveness  of  a  uniform 
law  and  centralized  administration  are  apparent.  Such 
uniform  control  has  already  proved  beneficial  and  effec- 
tive in  the  regulation  of  interstate  trade. 

In  1916  the  United  States  Child  Labor  Law  was  passed, 
and  became  effective  September  1,  1917,  a  period  of  one 
year  being  given  employers  in  which  to  make  readjust- 
ments necessitated  by  its  provisions.  Under  the  terms 
of  this  act  Congress  prohibited  the  shipment  in  foreign 
and  interstate  commerce  of  those  goods  produced  in  fac- 
tories and  canneries  which,  within  thirty  days  preceding 
the  removal  of  such  goods,  had  employed  children  under 
14  years  of  age,  or  children  between  the  ages  of  14  and 
16  for  more  than  8  hours  in  any  day  or  6  days  in  any 
week,  or  after  the  hour  of  7  p.m.  and  before  6  a.m.  The 
same  restrictions  were  imposed  on  any  article  produced 
by  any  mine  or  quarry  in  the  United  States  employing 
children  under  16  years  of  age.  Although  this  statute 
was  welcomed  by  the  friends  of  federal  legislation,  its 
provisions  were  considered  inadequate  since  it  was  es- 
timated that  85  per  cent  of  the  working  children  of  the 
United  States  were  in  industries  not  covered  by  this  law ; 
namely,  in  agricultural  pursuits,  mercantile  establish- 
ments, offices,  and  numerous  street  trades. 

On  June  3,  1918,  after  the  law  had  been  in  operation 
only  273  days,  the  Supreme  Court  of  the  United  States 


Labor  Legislation  599 

handed  down  a  decision  declaring  the  federal  statute  un- 
constitutional on  the  grounds  that  the  interstate  com- 
merce clause  of  the  act  could  not  be  invoked  to  prevent 
child  labor  within  the  respective  states.  Pour  of  the  nine 
judges  dissented,  and  the  court  was  unanimous  in  the 
opinion  that  child  labor  is  an  evil,  and  that  civilized 
countries  must  put  limitations  on  the  right  to  employ 
children  in  mines  and  factories.  It  was  necessary,  how- 
ever, to  find  a  method  of  national  control  which  would 
not  be  in  conflict  with  the  limitation  imposed  by  the 
federal  Constitution.  The  immediate  effect  of  the  decision 
was  that,  in  states  where  child  labor  standards  were  lower 
than  those  imposed  by  the  federal  law,  the  longer  work- 
ing-day for  children  under  J6  years  was  restored,  and  the 
number  of  working  children  increased.  Moreover,  in  a 
number  of  states  there  was  an  appreciable  increase  in 
the  violations  of  state  laws.  For  example,  of  53  factories 
visited  in  one  state  shortly  after  the  federal  law  had  been 
declared  unconstitutional,  47  were  found  violating  the 
state  law  by  employing  430  children  under  12  years  of 
age,  while  in  the  49  factories  inspected  in  this  state  during 
the  operation  of  the  federal  law  only  95  children  under 
14  years  were  found  at  work.  In  another  state  721  chil- 
dren under  14  were  employed  in  canneries,  50  per  cent 
of  whom  were  under  10  years  of  age.8 

In  an  attempt  to  circumvent  constitutional  hindrances 
and  to  achieve  the  same  end  as  the  earlier  statute,  the 
taxing  power  of  the  federal  government  was  invoked. 
The  revenue  act  of  1918,  approved  February  24,  1919, 
provided  for  an  excise  tax  on  the  products  of  child  labor. 
The  essential  features  of  the  new  law  corresponded  to  those 
embodied  in  the  act  of  September  1,  1916,  except  that 
the  new  measure,  instead  of  prohibiting  the  shipment  in 
interstate  commerce  of  such  goods  as  are  there  enumerated, 
imposed  an  excise  tax  of  ten  per  cent  oh  the  net  profits 
from  the  operation  of  mines,  quarries,  mills,  canneries, 
workshops,  factories,  or  manufacturing  establishments 
employing  children  in  violation  of  the  conditions  laid 

*U.  8.  Children's  Bureau,  Seventh  Annual  Seport,  1919,  pp.  21,  22. 


600  Labor  Legislation 

down.  Because  it  was  a  tax  measure,  the  administration 
of  the  new  law  rested  with  the  Secretary  of  the  Treasury, 
especially  with  the  Commissioner  of  Internal  Revenue. 
The  Secretary  of  Labor  was  made  a  member  of  a  board  to 
formulate  regulations  as  to  certificates,  etc.,  and  this  official 
or  his  representative  had  authority  to  make  inspection  of 
any  establishment  or  enterprise  on  request  of  the  Com- 
missioner of  Internal  Revenue.  The  Children's  Bureau 
of  the  Department  of  Labor  was  the  logical  agency  to  carry 
on  such  investigations. 

Judge  James  E.  Boyd,  of  the  Western  District  of  North 
Carolina,  whose  decision  against  the  earlier  federal  statute 
was  sustained  by  the  Supreme  Court  of  the  United  States, 
rendered  a  similar  decision  on  August  22,  1921,  with 
regard  to  the  new  measure.  He  held  the  statute  uncon- 
stitutional as  an  attempted  interference  with  the  right 
of  the  states  to  regulate  labor  within  their  respective 
boundaries,  and  pointed  out  that  the  only  difference  be- 
tween the  two  laws  was  the  tax  of  ten  per  cent  on  the 
net  profits  of  the  entire  product  of  the  establishments 
involved.  The  case  was  taken  immediately  to  the  Supreme 
Court  of  the  United  States  which,  in  May,  1922,  declared 
the  law  unconstitutional,  as  an  invalid  attempt  by  Congress 
to  regulate  through  its  taxing  power  something  entirely 
within  the  jurisdiction  of  the  several  states  in  the  exercise 
of  their  police  powers.  The  decision  was  received  very 
unfavorably  by  the  public,  and  a  vigorous  attempt  will 
doubtless  be  made  to  secure  an  amendment  to  the  Constitu- 
tion making  possible  federal  control. 

Because  children  are  wards  of  the  state,  the  constitu- 
tionality of  state  legislation  designed  to  protect  their 
interests  is  not  questioned.  A  child  is  legally  incapable 
of  negotiating  a  free  contract  and  is  not  lawfully  respon- 
sible for  the  performance  of  contractual  relations,  there- 
fore child  labor  laws  do  not  deprive  such  persons  of 
freedom  of  contract  without  due  process  of  law.  There  is 
every  reason  to  believe  that  a  federal  law  would  obliterate 
the  unfavorable  effects  of  interstate  competition  which  now 
obtain  under  the  heterogeneous  regulations  of  forty-eight 


Labor  Legislation  601 

states,  ana  would  be  enforced  more  effectively  than  many 
state  laws. 

Protective  Legislation  for  Women. — The  movement  for 
the  legal  protection  of  women  workers  developed  almost 
contemporaneously  with  the  movement  for  the  protection 
of  children,  and  in  many  instances  the  same  legislation 
has  been  made  applicable  to  both  of  these  groups  of 
workers.  Laws  limiting  the  hours  of  employment  were 
most  prominent  among  the  early  protective  measures  for 
women.  In  the  decades  preceding  1879  several  states  in 
which  the  textile  industries  prevailed  passed  10-hour 
laws,  but  these  were  for  the  most  part  unenforceable, 
and  it  was  not  until  1879,  in  Massachusetts,  that  an  effec- 
tive type  of  law  was  provided.  Similar  measures  were 
adopted  by  other  states  from  time  to  time,  and  in  1908 
the  movement  was  given  a  great  impetus  by  the  action 
of  the  United  States  Supreme  Court  in  sustaining  the 
Oregon  10-hour  law  for  women.  At  the  present  time 
(1922)  there  are  only  four  states — Alabama,  Florida, 
Iowa,  and  West  Virginia — that  do  not  have  some  sort  of 
law  regulating  the  hours  of  work  for  women.  Indiana 
has  only  one  limitation  of  hours;  namely,  the  prohibition 
of  the  employment  of  women  at  night  in  manufacturing 
establishments.  All  other  states  have  either  forbidden 
the  employment  of  women  for  more  than  a  certain  number 
of  hours  per  day  or  week  or  have  penalized  all  overtime 
by  providing  that  it  must  be  paid  for  at  an  increased 
rate.  Numerous  other  measures  have  been  enacted  which 
regulate  working  conditions,  provide  a  minimum  wage, 
control  the  conditions  under  which  homework  may  be 
carried  on,  require  that  seats  be  furnished,  provide 
mothers'  pensions,  and  prohibit  employment  in  certain 
industries  or  occupations  that  are  deemed  injurious. 

The  legal  working-day  for  women  consists  of  8  hours 
in  nine  states;  8y2  hours  in  one  state;  9  hours  in  fifteen 
states;  10  hours  in  nineteen  states;  and  more  than  10 
hours  in  four  states — New  Hampshire,  Vermont,  Ten- 
nessee, and  North  Carolina.  South  Carolina  provides  a 
JO-hour  day  in  cotton  manufacturing  establishments  and 


602  Labor  Legislation 

a  12-hour  day  in  mercantile  establishments.  The  weekly 
hours  of  labor  range  from  48  in  the  states  of  Massachu- 
setts, North  Dakota,  Utah,  Oregon,  and  California,  to  70 
in  Illinois  and  South  Dakota,  and  no  limitation  in  the 
five  most  backward  states  already  mentioned.  Most  of 
the  laws  specify  the  same  daily  and  weekly  maximum 
hours  for  all  occupations  included,  and  the  provisions  are 
applicable  to  the  most  important  industries  employing 
women.  Farm  work  and  domestic  service  are  excluded 
on  the  ground  that  these  occupations  are  not  injurious  to 
health.  Although  most  of  the  states  have  regulations  con- 
cerning the  hours  of  labor,  only  nineteen  have  provided 
for  a  day  of  rest  or  one  shorter  work-day  in  seven,  time 
for  meals,  and  rest  periods. 

Thirty-five  states  have  no  laws  prohibiting  night  work 
for  women,  while  of  the  thirteen  states  which  have  such 
regulations  eight  make  the  provision  applicable  to  more 
than  one  occupation,  three  to  manufacturing  only,  one 
to  mercantile  establishments  only,  and  one  to  ticket  sellers 
only.  Two  states  limit  night  work  for  women  to  8  hours. 
The  most  common  period  during  which  night  work  is 
prohibited  is  from  10  p.m.  to  6  a.m.,  while  the  longest 
period  during  which  night  work  is  prohibited  is  from 
6  p.m.  to  6  a.m.  in  textile  manufacturing  in  Massachusetts. 
About  one-fourth  of  the  states  have  laws  either  prohibiting 
or  regulating  homework.  In  ten  states,  homework  in  the 
manufacture  of  clothing,  trimmings,  and  tobacco  products 
is  prohibited  for  all  persons,  except  the  immediate  mem- 
bers of  a  family.  There  are  also  specific  regulations 
concerning  cleanliness,  adequate  lighting  and  ventilation, 
and  freedom  from  contagious  and  infectious  diseases.  A 
large  number  of  states  prohibit  the  employment  of  women 
in  mines,  while  others  prohibit  their  employment  in  other 
dangerous  occupations.  Several  states  prohibit  the  em- 
ployment of  women  in  manufacturing,  mechanical,  or  mer- 
cantile establishments  within  two  weeks  before  or  four 
weeks  after  childbirth. 

Minimum  Wage  Laws. — Among  the  most  recent  exten- 
sions of  the  principle  of  protective  legislation  is  the  legal 


Labor  Legislation  603 

minimum  wage,  which,  by  specifying  minimum  standards 
of  pay  for  certain  groups  of  workers,  seeks:  (1)  to  protect 
the  health  and  welfare  of  those  workers;  (2)  to  equalize 
the  bargaining  power  of  employers  and  employees  covered 
by  the  laws;  and  (3)  to  promote  social  welfare  and 
progress.  These  laws  are  usually  made  applicable  to 
women  and  minors  and  other  low-skilled  and  unskilled 
workers.  Among  such  workers  labor  organization  and 
collective  bargaining  have  made  little  progress,  and  the 
keenness  of  competition  among  them  has  resulted  in  the 
depression  of  wage  scales  to  a  substandard  equivalent 
to  the  bargaining  power  of  the  weakest  individual  bar- 
gainer. In  a  very  real  sense,  therefore,  the  state  inter- 
venes to  secure  for  these  workers  the  full  competitive 
rate  of  wages. 

Minimum  wage  legislation  originated  in  Australia.  Its 
rudiments  are  found  in  the  district  conciliation  boards 
of  New  Zealand,  established  in  1894,  for  the  compulsory 
arbitration  of  labor  disputes.  In  addition  to  maintaining 
industrial  peace,  these  boards  are  authorized  to  prevent 
sweating  by  fixing  minimum  wages  for  underpaid  work- 
ers. The  first  independent  minimum  wage  law,  however, 
was  passed  in  the  Australasian  state  of  Victoria  in  1896, 
and  was  secured  through  the  efforts  of  the  Anti-Sweating 
League  in  an  attempt  to  crush  sweatshop  industries. 
Special  boards  were  created,  composed  of  an  equal  num- 
ber of  employers  and  employees,  with  an  outside  chairman 
nominated  by  both  parties.  Wage  boards  were  at  first 
confined  to  the  six  most  sweated  trades  of  boot-making 
and  baking,  employing  mostly  men;  clothing,  shirt-mak- 
ing and  underclothing,  employing  mostly  women;  and 
furniture-making,  in  which  the  presence  of  Chinese  work- 
ers resulted  in  a  substandard  scale  of  wages.  In  1900, 
at  the  end  of  the  experimental  period  of  four  years,  the 
wage-board  system  was  extended  to  other  trades,  and  in 
1904  the  act  was  made  permanent.  Minimum  wage  rates 
are  now  set  for  "all  the  important  manufacturing  occupa- 
tions in  the  cities,  and  also  for  street  railways,  mercantile 
and  clerical  employments,  mining,  and  even  for  certain 


604  Labor  Legislation 

agricultural  workers."3  Both  employers  and  employees 
are  apparently  in  favor  of  the  wage-board  system.  The 
success  of  minimum  wage  legislation  in  Victoria  resulted 
in  the  enactment  of  similar  provisions  in  connection  with 
compulsory  arbitration  laws  in  South  Australia,  Queens- 
land, New  South  Wales,  and  Tasmania,  during  the  decade 
1900-1910. 

Investigations  of  sweatshop  methods  and  insufficient 
wages  in  Great  Britain,  by  such  agencies  as  the  National 
Anti-Sweating  League  and  the  British  Labor  Party,  re- 
sulted in  the  enactment  of  the  Trade  Boards  Act  in  1909, 
which  provides  for  the  establishment  of  wage  boards  pat- 
terned after  the  Victorian  system.  The  Board  of  Trade 
is  authorized  to  establish  and  supervise  separate  trade 
boards  in  exceptionally  low-paid  trades.  Tailoring,  paper 
box  making,  the  finishing  of  machine-made  lace,  and  the 
manufacture  of  certain  kinds  of  chain,  employing  alto- 
gether about  250,000  workers,  were  first  brought  under 
regulation.  In  1913  the  law  was  made  applicable  to  five 
additional  sweated  trades,  while  in  1912  the  unprecedented 
departure  was  made  of  establishing  representative  district 
boards  to  determine  the  minimum  wages  and  conditions 
of  employment  in  the  well-organized  and  skilled  trade 
of  coal  mining.  In  1919  several  other  industries  were 
brought  under  regulation,  and  the  establishment  of  a 
minimum  wage  for  agricultural  laborers  was  made  pos- 
sible. Further  extensions  of  the  minimum  wage  principle 
are  being  made  in  Great  Britain.  The  movement  has 
spread  to  other  countries,  including  France,  which  adopted 
the  minimum  wage  for  women  homeworkers  in  the  cloth- 
ing industry  in  1915 ;  the  Argentine  Republic  which  en- 
acted a  trades-board  law  for  homeworkers  in  1918;  the 
Canadian  provinces  of  British  Columbia,  Quebec,  Mani- 
toba, and  Saskatchewan,  which  passed  minimum  wage  law 
in  1918  and  1919,  and  several  other  important  countries. 

Massachusetts  was  the  first  American  state  to  pass  a 
minimum  wage  law.  This  law,  enacted  in  1912,  was  the 
result  of  recommendations  by  an  investigating  commission 

»  Commons  an<J  Andrews,  Principles  of  Labor  Legislation,  p.  189, 


Labor  Legislation  605 

which  had  been  appointed  in  1911.  The  example  of  Massa- 
chusetts was  followed  in  1913,  by  eight  other  states — Cali- 
fornia, Colorado,  Minnesota,  Nebraska,  Oregon,  Utah, 
Washington,  and  Wisconsin.  Arkansas  and  Kansas  fol- 
lowed in  1915,  Arizona  in  1917,  the  District  of  Columbia 
in  1918,  and  North  Dakota  and  Texas  in  1919.  The 
Colorado  law  has  remained  a  dead  letter.  Two  constitu- 
tional amendments  have  been  made  to  allow  minimum 
wage  legislation — California  in  1914,  for  women  and 
minors,  and  Ohio  in  1912,  for  all  classes  of  workers.  The 
Ohio  legislature  has  not  acted  on  this  provision.  Under 
the  provisions  of  the  Kansas  Industrial  Court  Act  of  1920, 
a  minimum  wage  may  be  established  in  industries  affect- 
ing the  public  welfare.  The  Nebraska  law  was  repealed 
in  1919,  and  the  Texas  law  in  1921,  which  leaves  at  the 
present  time  twelve  states,  the  District  of  Columbia,  and 
the  territory  of  Porto  Rico  (1919)  with  minimum  wage 
laws.  Minimum  wage  laws  in  the  United  States  protect 
only  women  and  children  against  sweating,  whereas  in 
other  countries  all  sweated  workers  are  coming  under 
the  protection  of  the  law.  This  can  be  accounted  for  by 
the  fact  that  labor  organizations  in  the  United  States 
have  opposed  unequivocally  minimum  wage  laws  for  men, 
on  the  ground  that  organized  male  workers  can  secure 
better  standards  of  wages,  hours,  and  conditions  through 
organization  and  collective  bargaining  than  by  legislation. 
The  standards  and  methods  of  procedure  followed  in 
the  administration  of  minimum  wage  laws  vary,  but  some 
general  principles  obtain  even  in  the  United  States  where 
there  are  so  many  laws.  The  fundamental  purpose  is 
to  pay  a  living  wage  which  is  commonly  interpreted  as 
the  amount  of  income  sufficient  to  maintain  self-support- 
ing women  in  reasonable  comfort,  physical  welfare, 
decency,  and  moral  well-being.  Experience  indicates  that 
with  few  exceptions  the  actual  wage  standards  set  under 
these  laws  have  been  somewhat  above  what  they  would 
have  been  in  the  absence  of  legal  regulation,  but  below 
what  investigations  disclose  as  a  living  wage.  The  wage 
may  be  a  minimum  flat  rate  fixed  by  law  for  specified 


606  Labor  Legislation 

industries  or  occupations,  as  in  Arizona,  Utah,  Arkansas, 
and  Porto  Rico;  or  it  may  be  a  minimum  rate  more 
or  less  flexible,  determined  by  boards  or  commissions 
with  power  to  make  investigations  as  a  guide  to  wage 
determinations.  Voluntary  wage  or  trade  boards  acting 
in  an  advisory  capacity  are  usually  appointed  by  the 
state  minimum  wage  board  or  commission,  or  some  other 
authority  in  charge  of  the  administration  of  the  law. 
These  advisory  boards  consist  of  representatives  of  the 
employers  and  the  employees  concerned  in  the  adjust- 
ment, and  of  the  public,  and  their  deliberations  are  based 
upon  information  gathered  by  the  state  commission.  The 
wage  finally  fixed  by  these  advisory  bodies  is  usually  a 
compromise  between  the  representatives  of  employers  and 
employees,  but  their  decision  is  often  subject  to  the  en- 
dorsement of  the  state  board,  and  an  appeal  may  be  had 
to  the  court  before  the  rate  is  put  into  effect. 

The  highest  wages  set  in  any  of  these  awards  are  $18 
per  week  for  the  public  housekeeping  occupation  in  the 
State  of  Washington  and  $20  per  week  for  office  workers 
in  North  Dakota.  Wages  fixed  by  statute  have  not  been 
adjusted  to  price  changes  and  the  cost  of  living.  For 
example,  the  rate  in  Utah  and  Arkansas  is  $7.50  per 
week  for  experienced  women.  For  this  reason  it  is  highly 
desirable  that  the  rate  be  a  flexible  one  determined  by 
wage  boards  in  accordance  with  the  prevailing  cost  of 
living  and  other  conditions.  The  awards  of  the  boards 
or  commissions  are  mandatory  in  all  states  except  Massa- 
chusetts, where  publicity  and  public  opinion  are  relied 
upon  for  enforcement.  In  fixing  wage  standards,  the 
boards  in  such  states  as  California,  Oregon,  Washington 
and  Massachusetts  take  cognizance  of  the  regularity  of 
employment,  and  allow  a  slightly  higher  wage  for  sea- 
sonal or  irregular  employments.  This  encourages  the 
employer  to  regularize  his  production.  Provisions  are 
also  made  for  substandard  workers,  such  as  the  physically 
and  mentally  defective,  young  workers,  apprentices,  and 
inexperienced  workers,  who  normally  cannot  earn  the 
minimum.  To  avoid  the  substitution  of  minors  and  in- 


Labor  Legislation  607 

experienced  workers  for  adults,  and  abuse  of  the  appren- 
ticeship system,  it  has  been  found  necessary  to  provide 
a  progressive  wage  for  apprentices  and  inexperienced 
workers,  and  to  fix  definitely  the  period  for  learning  a 
trade  and  the  maximum  proportion  of  apprentices  to  the 
number  of  workers  in  the  establishment.  Special  licenses 
are  granted  to  permit  the  employment  of  infirm  and  slow 
workers  unable  to  earn  the  prescribed  minimum,  but  care 
is  exercised  to  limit  the  proportion  of  such  workers  that 
may  be  employed  in  any  one  establishment. 

Minimum  wage  laws  have  been  criticized  for  the  fol- 
lowing reasons:  (1)  They  are  an  attempted  contravention 
of  the  free  play  of  economic  forces  in  wage  determination, 
and  cannot  be  relied  upon  to  improve  the  wage  standard 
of  any  group;  (2)  they  result  in  serious  injury  to  em- 
ployers in  progressive  states  where  such  laws  are  enacted, 
because  these  employers  have  to  compete  with  the  more 
cheaply  produced  goods  of  industries  operated  In  states 
having  no  such  laws;  (3)  they  tend  to  discourage  labor 
organizations,  because  the  workers  will  not  give  financial 
support  to  the  labor  movement  when  they  can  secure  the 
same  ends  without  expense,  through  the  medium  of  law; 
(4)  the  minimum  wage  becomes  the  maximum,  and  re- 
sults in  economic  injury  to  those  whom  it  is  designed 
to  benefit ;  and  (5)  they  put  a  premium  upon  inefficiency, 
since  workers  are  assured  a  minimum  wage  regardless 
of  output. 

Experience  In  every  country  indicates  that  none  of 
these  ill  effects  have  resulted  from  the  enactment  and 
application  of  minimum  wage  legislation,  but  that  op- 
posite tendencies  have  been  much  in  evidence.  In  Aus- 
tralasia and  Great  Britain  an  increasing  number  of 
occupations  are  being  brought  within  the  operation  of 
these  lawg,  and  the  results  have  warranted  this  extension. 
An  exhaustive  investigation  by  the  United  States  Bureau 
of  Labor  Statistics  disclosed  the  fact  that  minimum  wage 
laws  in  this  country  are  functioning  satisfactorily.  The 
income  of  the  workers  covered  by  these  laws  has  been 
largely  increased  as  a  whole.  A  moderate  rate  increased 


608  Labor  Legislation 

the  pay-roll  about  $97,000  annually  in  one  instance,  and 
a  rate  of  about  $13  a  week  raised  the  pay  in  one  industry 
more  than  100  per  cent  in  many  cases,  and  more  than 
33y3  per  cent  throughout  the  industry.  These  isolated 
cases  are  said  to  be  typical  of  results  everywhere.  "The 
laws  have  had  a  large  beneficial  effect  not  only  in  supply- 
ing the  actual  necessities  of  the  workers,  but  in  trans- 
ferring entire  industries  from  a  makeshift  parasitic  basis 
to  one  of  self-support,  making  them  an  economic  asset 
to  the  community  instead  of  a  burden."*  The  rates 
applied  have  not  been  so  high  as  to  bar  women  from 
employment  and  to  attract  men,  as  was  feared  by  many 
persons  who  opposed  the  laws.  The  reduction  of  child 
labor  has  resulted,  but  this  is  an  effect  desired  by  all 
except  the  unscrupulous  sweatshop  operator. 

Trade  unionists  feared  that  employers  would  take  on 
learners  and  would  discharge  employees  who  reached  the 
stage  of  experience  when  increased  pay  became  necessary, 
thus  evading  the  law  in  spirit  while  obeying  it  in  form. 
This  evasion  is  prevented  by  control  of  learners'  licenses 
and  the  limitation  of  apprentices  to  a  definite  proportion 
of  the  total  number  of  women  and  girls  employed  in  the 
establishment.  The  number  of  employers  who  express  oppo- 
sition to  the  laws  is  negligible,  though  there  are  some  that 
denounce  them  vigorously.  Many  employers  praise  the  re- 
sults as  beneficial  to  their  own  business  and  to  the  women 
employed.  Employees  have  found  in  these  laws  a  source 
of  great  protection  and  benefit,  and  organized  labor  now 
promotes  such  legislation  for  women  and  minors.  Allega- 
tions of  injury  to  the  workers  have  proved  false.  "Not 
only  have  these  laws  secured  to  women  increased  pay  in 
large  aggregate  amounts,  but  they  have  at  the  same 
time  standardized  competitive  conditions  in  the  locality, 
and  largely  done  away  with  the  secrecy  that  many  em- 
ployers have  practiced  as  to  individual  rates,  by  which 
unwarranted  discriminations  have  been  made  possible  in- 

4Lindley  D.  Clark,  "Minimum  Wage  Laws  in  the  United  States,' 
Monthly  Labor  Eeview,  March,  1921,  p.  16. 


Labor  Legislation  609 

side  their  establishments — results  of  great  value  from 
moral  and  economic  standpoints. ' ' 5 

Minimum  wage  laws  in  the  United  States  are  far  from 
perfect,  and  numerous  improvements  have  been  suggested, 
including  fuller  protection  of  employee  representatives 
on  wage  boards  from  discrimination  on  account  of  their 
testimony  and  activities  in  wage  adjustments;  more  ade- 
quate provision  for  wages  in  seasonal  and  irregular  em- 
ployments ;  stricter  licensing  of  substandard  workers,  and 
more  careful  grading  of  these  workers  as  to  age  and 
experience,  with  a  fixed  minimum  below  which  their 
wages  shall  not  fall ;  more  scrupulous  control  of  the  pro- 
portion of  apprentices  to  adult  workers,  and  the  provision 
of  a  progressive  wage  scale  for  learners  according  to  time 
of  service  and  efficiency;  the  adoption  of  more  flexible 
wage  standards  to  permit  rapid  adjustment  of  wages  to 
changes  in  the  cost  of  living;  centralization  of  adminis- 
trative control  in  the  hands  of  minimum  wage  commis- 
sions, thus  relieving  overburdened  industrial  commissions ; 
provision  for  regular  regional  conferences  of  representa- 
tives of  minimum  wage  commissions  in  neighboring  states, 
with  a  view  to  standardization  of  wage  scales  for  the 
same  industries;  and,  finally,  a  more  enlightened  public 
opinion  and  fuller  representation  of  the  public  on  ad- 
visory wage  boards." 

Law  and  the  Employment  of  Adult  Male  Workers. — 
Legal  protection  has  not  been  extended  so  readily  to  men 
as  to  women  and  children  in  industry.  This  is  due  partly 
to  the  antagonistic  attitude  of  the  courts  towards  legal 
limitations  on  the  employment  of  men,  and  partly  to  the 
persistent  opposition  of  organized  labor  which  is  based 
upon  the  fear  that  the  prestige  of  unionism  will  be  greatly 
weakened  if  reforms  are  secured  through  legislation  in- 
stead of  by  collective  bargaining.  Nevertheless,  men  now 
share  in  numerous  protective  measures,  such  as  those 

1  Clark,  op.  <•<!..  p.  20. 

•Dorothy  W.  Douglaa,  "American  Minimum  Wage  Laws  at  Work," 
American  Economic  Review,  Vol.  IX,  No.  4,  December,  1919,  pp. 
701-738. 


610  Labor  Legislation 

which  regulate  the  physical  conditions  of  work,  the  pay- 
ment of  compulsory  compensation  for  accidents,  wage 
payments  and,  to  a  certain  extent,  hours  of  labor. 

Laws  governing  the  hours  of  labor  for  men  now  apply 
to  (1)  public  works;  (2)  mines,  smelters,  laundries,  and 
similar  occupations  which  are  deemed  dangerous  and  un- 
healthful;  (3)  transportation;  and  (4)  factories  and 
workshops.  In  determining  the  length  of  the  working- 
day  on  public  works  the  government  acts  in  the  capacity 
of  an  employer.  In  1840  President  Van  Buren  issued  an 
executive  order  prescribing  a  ten-hour  day  in  government 
navy-yards.  In  1868  a  law  was  passed  providing  an  eight- 
hour  work  day  for  all  laborers,  workmen,  and  mechanics 
employed  by  the  United  States  government.  The  failure 
of  the  latter  measure  to  prevent  agreements  for  overtime 
led  to  the  enactment  of  another  statute  in  1892  which 
provided  penalties  for  violations.  The  effectiveness  of 
this  law  was  limited  by  the  action  of  the  courts  and  the 
attorney  general  in  holding  that  government  work  let 
out  to  private  contractors  was  not  included  in  its  provi- 
sions. It  was  not  until  1912  that  a  more  satisfactory 
measure  was  enacted,  which  specified  that  an  eight-hour 
clause  shall  be  inserted  in  all  contracts  made  by  the 
federal  government  and  involving  the  employment  of 
laborers  or  mechanics.  Exceptions  were  allowed  in  case 
of  emergencies,  for  contracts  in  transportation  by  land 
or  water,  and  a  few  other  instances.  Other  federal  em- 
ployees such  as  post-office  employees  have  also  been  given 
the  eight-hour  day.  In  addition  to  the  action  of  the 
federal  government  over  half  the  states  have  eight-hour 
laws  for  employees  on  public  works,  and  many  municipali- 
ties have,  either  by  charter  provisions  or  by  special  or- 
dinances, provided  an  eight-hour  day  for  municipal 
employees. 

Because  of  the  dangers  to  health  and  life  involved  in 
mining,  smelting,  the  refining  of  ores  and  metals,  and 
related  occupations,  about  sixteen  states  have  limited  the 
work-day  to  eight  hours  in  these  industries.  New  York, 
New  Jersey,  and  Pennsylvania  have  taken  the  significant 


Labor  Legislation  611 

step  of  attempting  to  adjust  the  hours  of  labor  according 
to  the  degree  of  danger  resulting  from  employment  in 
compressed  air,  so  that  the  higher  the  air  pressure  the 
shorter  the  work-day.  The  close  relation  that  obtains 
between  transportation  and  the  public  safety  has  resulted 
in  action  by  the  federal  government  and  most  of  the 
states  in  regulating  the  hours  of  work  for  employees  on 
steam  railways,  and  over  a  dozen  states  make  similar 
limitation  for  employees  on  street  railways.  In  1916  the 
Adamson  law  was  enacted  by  Congress  to  avert  a  national 
tie-up  of  the  railroads  at  a  critical  period.  This  law 
provides  for  a  basic  eight-hour  day  for  railroad  trainmen, 
but  is  in  reality  a  wage  measure.  By  federal  statutes 
passed  in  1913  and  1915;  respectively,  the  hours  of  labor 
for  deck  officers  and  seamen  are  limited  to  nine  while 
in  port,  except  in  emergencies.  Approximately  a  dozen 
states  have  legal  limitations  on  hours  of  labor  for  adult 
males  in  one  or  more  employments  in  factories  and  work- 
shops, including  such  establishments  as  electrical  plants, 
plaster  and  cement  mills,  saw-  and  planing-mills,  drug 
and  grocery  stores.  Two  states,  Mississippi  (1912)  and 
Oregon  (1913),  have  enacted  laws  limiting  the  working- 
day  to  ten  hours  for  all  classes  of  workers  in  general 
manufacturing  establishments.  In  each  state  exceptions 
are  allowed  in  the  case  of  emergencies.  Three  hours  of 
overtime  in  emergencies,  at  the  increased  rate  of  time  and 
one-half  is  allowed  under  the  Oregon  law,  while  in  Missis- 
sippi overtime  periods  of  twenty  minutes  are  allowed  on 
each  of  the  first  five  days,  to  be  deducted  from  the  last 
day  of  the  week.  By  constitutional  provision  or  by 
statute  about  half  of  the  states  declare  for  either  an 
eight-  or  a  ten-hour  day  in  the  absence  of  specific  con- 
tracts or  agreements,  but  these  have  no  influence  since 
they  are  merely  statements  of  a  general  principle  without 
specific  application. 

Regulation  of  the  Physical  Conditions  of  Employment. 
— In  modern  industry  men,  women,  and  children  are  ex- 
posed to  serious  hazards  to  health  and  life,  and  in  the 
mad  rush  for  greater  production  and  profits  employers 


612  Labor  Legislation 

have  frequently  failed  to  appreciate  human  values. 
Federal  and  state  governments  have  faced  the  necessity 
of  safeguarding  the  interests  of  society  by  enacting  laws 
governing  the  conditions  of  work.  Dangerous  machinery, 
gases,  acids,  and  dusts;  improper  lighting;  extremes  of 
temperature  and  humidity;  insanitary  conditions;  over- 
strain and  fatigue;  and  the  peculiar  hazards  of  certain 
occupations  such  as  mining  have  been  brought  under 
legal  surveillance.  In  addition  to  the  exclusion  of  child 
workers  under  a  certain  age  and  during  certain  hours, 
and  the  protection  of  women  workers,  the  health  of  em- 
ployees and  the  safety  of  the  public  have  made  it  ex- 
pedient to  require  specific  qualifications  and  training  for 
such  employees  as  electricians,  plumbers,  motion-picture 
operators,  miners,  and  engineers ;  and  to  limit  or  prohibit 
the  use  of  poisonous  substances  in  the  manufacture  of 
commodities,  such  as  the  use  of  poisonous  phosphorus  in 
the  manufacture  of  matches  and  white  lead  in  painting. 
Factories  and  workshops,  mines  and  allied  occupations, 
and  transportation  have  been  brought  within  the  limits 
of  the  factory  acts  and  other  regulatory  laws. 

Various  forms  of  protection  are  given  the  workers  in 
American  industries  under  the  most  progressive  state 
factory  laws. 

1.  Protection  from  Dangerous  Machinery. — Guards  must 
be  built  about  machines ;  set-screws  countersunk  to  the  level 
of  frames;  floor  openings  cased  or  railed  off;  shafts  and 
belts  guarded;  devices  installed  for  the  quick  stopping  of 
machinery;   adequate  space  provided  between  machines; 
passageways  kept  cleared;  facilities  installed  which  make 
possible  rapid  communication  between  the  workshop  and 
the  engine-room;  elevator  shafts  enclosed,   and  elevators 
equipped  with  automatic  clutches  to  prevent  falling.    Em- 
ployees must  be  familiar  with  the  machines  they  operate. 

2.  Protection  Against  Fire  Hazards. — Disastrous  factory 
fires  have  resulted  in  the  requirements  that  factories  shall 
be  equipped  with  easy  means  of  escape,  enclosed  gas-jets, 
red  lights   marking   "exits,"   adequate   facilities   for   ex- 
tinguishing fires,  and  that  smoking  shall  be  prohibited. 


Labor  Legislation  613 

3.  Lighting,  Heating,  and  Ventilation. — Legislation  pro- 
viding for  proper  lighting,  heating,  and  ventilation  facili- 
ties is  in  its  infancy.    Oregon,  Massachusetts,  and  Illinois 
have  either  by  law  or  by  order  of  the  industrial  commission 
adopted  certain  standards.     Factories  are  required  to  be 
lighted  according  to  a  certain  scale  of  light  values  and  the 
temperature   under   which   work   may   be   performed    is 
specified.    About  half  of  the  states  have  the  legal  require- 
ment that  factories  shall  be  properly  ventilated,  but  the 
provisions  are  very  indefinite.     The  Illinois  law  of  1909 
provides  that  exhausts,  fans,  and  other  devices  shall  be 
installed  to  remove  obnoxious  dusts  and  fumes,  in  order  to 
prevent  illness  and  death  from  contaminated  air.     This 
law,  moreover,  specifies  the  amount  of  fresh  air  that  must 
be  furnished  for  each  employee.     Food  and  drink  must 
not  be  eaten  in  workrooms  where  white  lead,  arsenic,  or 
other  poisonous  substances  are  used. 

4.  The  Provision  of  Seats,  Toilets,  and  Dressing-Rooms. 
— Almost  every  state  requires  that  suitable  seats  shall  be 
furnished  for  female  workers  in  mercantile  establishments, 
and  most  states  make  this  provision  applicable  also  to 
manufacturing    establishments.      Sanitary    and    separate 
toilets  for  women  workers  are  required  in  most  states,  and 
at  least  a  third  of  the  states  make  obligatory  the  provision 
of  adequate  dressing-rooms  for  women  employees. 

5.  Other    Protective    Requirements. — Other    protective 
regulations  include  the  prohibition  of  sleeping  in  work- 
rooms ;  the  provision  of  first-aid  kits  in  factories,  workshops, 
and  stores;  the  provision  of  clean,  disinfected  cuspidors; 
the  licensing  or  the  prohibition  of  the  manufacture  of 
garments,  foodstuffs,  and  tobacco  in  tenement  homes ;  and 
numerous  other  measures  conducive  to  health  and  safety. 

Mining,  tunneling,  and  transportation  are  safeguarded 
by  special  legal  regulations.  Legislation  is  in  force  which 
tends  to  reduce  to  a  minimum  the  hazards  to  health  and 
life  resulting  from  employment  in  the  construction  of 
bridges,  tunnels,  subways,  exceptionally  high  structures, 
and  all  work  done  in  compressed  air.  Mining  laws  pro- 
vide for  regular  inspection,  adequate  means  of  escape 


614  Labor  Legislation 

in  case  of  emergencies,  sufficient  ventilation  by  unob- 
structed air  channels,  careful  timbering  of  dangerous 
roof,  proper  methods  of  drilling  and  blasting,  safe  cages 
and  shafts  for  the  lowering  and  the  lifting  of  workers, 
protection  of  machinery,  safety  lamps,  proper  illuminating 
oil,  and  other  necessary  precautions.  Similar  protection 
to  health  and  life  is  provided  in  the  case  of  sailors.  Rail- 
road employees  are  protected  by  laws  requiring  such 
devices  as  automatic  couplers,  powerful  brakes,  ladders, 
running  boards,  and  full  crews. 

Protection  of  the  Worker  as  Debtor  and  Creditor. — 
There  obtains  practically  no  legal  means  of  enforcing 
the  specific  performance  of  the  labor  contract.  This  is 
why  the  so-called  labor  contract  has  been  designated  "a 
gentleman's  agreement."  Complete  enforcement  of  the 
labor  agreement  would  involve  the  forcing  of  men  to 
work  against  their  wishes,  and  this  would  be  in  violation 
of  the  constitutional  guaranty  against  involuntary  service. 
Suit  for  damages  by  the  employer  would  avail  little  or 
nothing  since  the  average  wage-earner  has  no  means  of 
paying  damages.  Moreover,  wage-earners  are  given  pro- 
tection by  laws  which  have  abolished  imprisonment  for 
debt,  so  that  redress  against  them  is  doubly  difficult  to 
secure.  Provided  there  is  neither  embezzlement  nor  other 
fraudulent  conduct,  the  inability  of  an  individual  to  pay 
his  debts  is  no  longer  a  reason  for  imprisonment. 

Other  protection  afforded  wage-earners  includes  laws 
governing  wage  exemption,  mechanics'  lien,  wage  pay- 
ment, and  competition  with  convict  and  immigrant  labor. 
Every  state  has  a  law  which  specifically  exempts  from 
attachment  and  execution  for  debt  the  wages  of  labor. 
The  various  laws  differ  as  to  the  amount  of  wages  so 
exempted.  The  sums  designated  are  either  thirty  days' 
wages,  sixty  days'  wages,  or  a  certain  per  cent  of  wages 
for  a  specified  period.  Exempted  amounts  range  from 
$20  to  $100.  Under  the  provisions  protecting  wages 
against  garnishment,  employers  who  pay  the  wages  of  a 
workman  to  his  creditors  are  responsible  to  him  for  a 
second  payment  of  an  equivalent  sum.  The  purpose  here 


Labor  Legislation  615 

is  obviously  to  safeguard  the  minimum  earnings  of  the 
workers,  and  the  power  to  sanction  such  class  protection 
rests  upon  the  fact  that  attachment  is  a  statutory  privilege 
conferred  by  the  legislature  and  not  a  vested  right  of 
the  creditor.  The  legislature,  therefore,  is  entitled  to  de- 
prive the  creditor  of  this  privilege. 

Wage-earners  also  share  in  the  protection  given  by  laws 
that  exempt  from  execution  the  tools  of  one's  trade  or 
profession,  including  homestead  rights.  Moreover,  a 
workman  can  not  assign  unearned  wages  except  upon 
consent  of  his  wife  and  of  his  employer.  To  safe- 
guard employees  from  avarice,  standard  laws  have  been 
passed,  which  require  credit  agents  to  be  licensed,  and 
specify  the  maximum  rates  of  interest  on  loans  up 
to  about  $300.  Under  some  of  these  laws  payment  of 
not  more  than  10  per  cent  of  the  wages  due  on  any  pay 
day  may  be  pledged,  and  this  only  upon  verification  of 
the  employer  and  the  wage-earner's  wife.  Interest  rates 
vary,  being  3l/2  on  unpaid  balances  in  some  states ;  5  per 
cent  per  month  on  loans  not  over  $50,  in  others;  and 
15  per  cent  per  annum  on  all  loans  up  to  $300,  in  still 
others.  The  license  fee  is  frequently  more  than  $100,  the 
provisions  in  Louisiana  being  $300  per  annum  on  a  capital 
of  less  than  $25,000,  and  $3,000  per  annum  on  capital  of 
$25,000  or  more. 

The  laborer  enjoys  special  protection  not  only  as  debtor 
but  also  as  creditor.  Most  states  have  laws  providing 
a  regular  pay  day  every  week,  two  weeks,  or  month. 
Wages  due  discharged  employees  must  be  paid  within  a 
specified  time,  24  hours  in  some  states,  and  failure  to 
comply  results  in  the  continuation  of  the  wage  rate  until 
full  payment  is  made.  Wages  must  be  paid  on  the 
premises  and  not  in  such  places  as  barrooms,  and  payment 
must  not  be  in  kind  or  orders  on  company  stores.  Limita- 
tions are  imposed  also  on  deductions  for  fines,  damages 
for  spoiled  work,  materials,  tools,  and  benefits,  except 
upon  the  worker's  consent.  Mechanics'  lien  is  among  the 
oldest  form  of  protection  granted  the  workers.  By  se- 
curity of  the  construction  or  land  on  which  they  have 


616  Labor  Legislation 

been  employed,  laborers  are  given  claim  for  payments 
due  them.  Up  to  certain  amounts  and  within  certain 
limits  workers  have  prior  claim  next  to  the  payment  of 
fees,  costs,  and  taxes  in  case  of  receiverships  caused  by 
death  or  bankruptcy. 

The  laborer  as  a  competitor  is  protected  by  immigration 
restriction  laws  and  legislation  governing  convict  labor. 
The  first  class  of  legislation  has  been  discussed  in  an 
earlier  chapter.7  An  investigation  made  by  the  United 
States  Bureau  of  Labor  in  1903  showed  a  yearly  average 
of  86,036  convicts  in  296  institutions,  of  whom  51,172, 
or  about  60  per  cent,  were  engaged  in  productive  work. 
The  total  market  value  of  all  goods  produced  by  convict 
labor  during  the  year  was  $34,276,205.  At  the  present 
time  there  are  approximately  100,000  prisoners  in  the 
major  penal  institutions,  and  probably  more  than  200,000 
serving  short  terms  in  smaller  institutions  or  awaiting 
action  by  the  courts.  Prison  labor  has  been  employed 
under  (1)  the  lease  system,  by  which  prisoners  are  farmed 
out  to  contractors  who  usually  exploit  them;  (2)  the  con- 
tract system,  under  which  the  convicts  are  let  out  to 
private  contractors,  but  the  work  is  performed  in  or  near 
the  prison  under  state  supervision;  (3)  the  piece-price 
system,  by  which  prisoners  are  farmed  out  to  contractors, 
but  the  state  superintends  the  work  and  determines  the 
speed  of  production;  (4)  the  public-account  system,  in 
which  the  state  manufactures  for  its  own  account  and 
secures  all  the  profit;  (5)  the  state-use  system,  where  the 
state  uses  prison  labor  in  production,  but  goods  are  dis- 
posed of  to  other  state  institutions  or  kept  for  prison 
consumption;  and  (6)  the  public  works  and  ways  system, 
Under  which  prison  labor  is  not  applied  to  the  production 
of  commodities  for  the  open  market,  but  is  used  in  the 
construction  and  repair  of  prison  buildings,  other  public 
buildings,  public  parks,  breakwaters,  and  similar  work. 
In  response  to  the  demands  of  organized  labor,  states  have 
largely  abandoned  the  first  four  systems.  An  interesting 
law  was  passed  in  Kansas  in  1920,  providing  pay  to  con- 

TChap.  Xin. 


Labor  Legislation  617 

victs  engaged  in  the  mining  of  coal  where  their  produc- 
tion exceeds  9  tons  per  week  per  man,  the  excess  to  be 
credited  at  rates  paid  miners  under  like  conditions  in  the 
same  district.  Sums  thus  earned  may  be  paid  to  the 
convict  or  his  dependents.  The  United  Mine  Workers  of 
America  has  endeavored  to  have  abolished  the  practice 
of  employing  convict  labor  in  mines  for  the  reasons  that 
it  imposes  upon  prisoners  penalties  not  intended  or 
prescribed  by  law,  since  they  assume  the  risks  and  hazards 
of  mining;  results  in  extraordinary  jeopardy  to  life  be- 
cause melancholy,  long-term  prisoners  are  irresponsible; 
and  brings  such  labor  into  direct  and  indirect  competition 
with  honest  labor. 

The  Courts  and  the  Constitutionality  of  Labor  Laws — 
Because  of  their  unfavorable  decisions  in  cases  involving 
the  constitutionality  of  legislation  designed  to  protect  the 
workers,  American  courti  have  been  condemned  as 
antiquated  in  viewpoint  and  method,  basing  their  deci- 
sions on  logic  rather  than  the  current  facts  of  economic 
life;  individualistic  rather  than  socialized,  protecting 
property  rights  rather  than  personal  rights,  and  exag- 
gerating private  right  at  the  expense  of  public  right  and 
welfare;  ultraconservative,  basing  their  decisions  upon 
eighteenth  century  legal  philosophy  and  failing  to  meet 
the  needs  of  a  changing  industrial  society ;  indefinite  and 
often  inconsistent  and  contradictory  in  their  opinions, 
so  that  a  law  which  is  constitutional  in  one  jurisdiction 
may  be  unconstitutional  in  another;  and  autocratic  in 
their  power,  declaring  void  many  progressive  and  con- 
structive measures  which  have  received  the  endorsement 
of  the  people's  representatives  and  the  sanction  of  an 
enlightened  public  opinion. 

These  indictments  have  been  supported  by  a  mass  of 
historical  evidence  from  labor  cases.  The  constitutional- 
ity of  such  laws  has  depended  too  largely  upon  the  eco- 
nomic bias  of  judges  who  are  familiar  with  the  technicali- 
ties of  the  law  but  often  ignorant  of  what  is  going  on  in 
industrial  life.  The  courts  have  often  laid  down  the 
postulate  that  the  employer  and  employee  have  equality 


618  Labor  Legislation 

of  right,  and  any  legislation  that  disturbs  that  equality 
is  an  arbitrary  interference  with  liberty  of  contract. 
Under  this  dictum  the  activities  of  labor  organizationa 
have  been  greatly  limited,  and  laws  regulating  wages, 
hours,  and  conditions  of  employment  have  been  declared 
null  and  void.  "Freedom  of  contract"  and  "equality 
of  rights"  are  attractive  terms,  but  the  courts  are  gradu- 
ally learning  that  in  the  complex  industrial  life  of  the 
present  century  the  inequality  of  bargaining  power  be- 
tween employers  and  employees  is  so  pronounced  that 
anything  approaching  liberty  of  contract  and  equality  of 
advantage  is  practically  impossible.  Protective  laws  have 
also  been  held  unconstitutional  because  they  have  (1) 
imposed  "unreasonable  classification  of  industries,"  JPe- 
sulting  in  discrimination  against  certain  classes  of  occupa- 
tions and  not  affording  equality  of  treatment  to  all;  (2) 
given  rise  to  "class  legislation,"  in  that  protection  is 
afforded  one  class  of  employees,  as  women,  without  ex* 
tending  the  same  favors  to  other  classes  of  workers;  (3) 
and  deprived  the  employer  of  his  property  right  to  run 
his  business  as  he  sees  fit,  thus  taking  property  without 
"due  process  of  law." 

Under  the  larger  conception  of  social  justice,  the  archaic 
theories  of  natural  and  absolute  rights,  freedom  of  con- 
tract, and  equality  of  bargaining  power  are  yielding  to 
the  more  fundamental  considerations  of  health  and  safety, 
and  public  welfare  and  benefit.  Judicial  decisions  mani- 
fest an  increasing  tendency  to  adapt  the  law  to  the  facts 
of  industrial  life.  Through  the  exercise  of  what  is  known 
as  the  "police  power,"  governments  extend  their  powers 
to  limit  or  abrogate  property  and  contract  rights  without 
indemnification,  when  such  action  becomes  necessary  to 
protect  the  physical,  moral,  or  general  welfare  of  society. 

The  doctrine  of  the  police  power  has  had  a  remarkable 
influence  upon  judicial  decisions  affecting  laws  governing 
the  hours  of  employment,  minimum  wages,  child  labor, 
factory  regulation,  workmen's  compensation,  and  other 
problems  of  industrial  relations.  For  example,  an  eight- 
hour  law  for  women  in  factories  in  Illinois  was  held 


Labor  Legislation  619 

unconstitutional  by  the  State  Supreme  Court  in  1895,  as 
an  abridgement  of  the  fourteenth  amendment  to  the 
federal  Constitution  assuring  freedom  of  contract  and  the 
right  of  property.  The  court  discovered  no  necessary 
relation  between  the  limitation  imposed  and  the  health, 
safety,  and  welfare  of  the  public.  The  Illinois  ten-hour 
law  for  women  passed  in  1909,  however,  was  sustained 
by  the  State  Supreme  Court  as  a  measure  designed  to 
protect  the  public  health.  The  relation  of  the  physical 
welfare  of  women  to  the  future  of  the  race  and  their 
weak  bargaining  power  have  been  the  chief  reasons  for 
sustaining  laws  limiting  their  hours  of  labor  and  prescrib- 
ing minimum  wages.  The  right  of  the  state  to  limit  hours 
of  work  for  men  in  mines  and  other  dangerous  occupa- 
tions has  been  practically  unquestioned  since  1898,  when 
the  Utah  eight-hour  law  for  these  workers  was  sustained 
by  the  United  States  Supreme  Court  in  Holden  v.  Hardy. 
This  decision  laid  down  the  principle  that,  in  view  of  the 
inequality  of  bargaining  power  and  the  relation  of  danger- 
ous and  unhealthful  occupations  to  social  progress,  the 
police  power  of  the  state  can  be  exercised  legitimately 
in  the  protection  of  labor.  Similar  reasoning  led  the 
United  States  Supreme  Court  to  sustain  the  Oregon  ten- 
hour  law,  in  1908 ;  the  California  eight-hour  law,  in  1915 ; 
and  the  Oregon  case  involving  the  power  of  a  commission 
to  regulate  women's  hours  of  work,  in  1917.  Limitation 
of  hours  of  work  for  employees  engaged  in  transportation 
has  been  sustained  chiefly  because  the  safety  of  the  travel- 
ing public  is  involved. 

Conclusions. — From  the  point  of  view  of  the  protection 
of  the  wage-earning  classes,  the  nineteenth  century  and 
the  first  decades  of  the  twentieth  century  are  replete  with 
encouragement.  The  subordination  of  property  rights  to 
the  interest  of  public  health,  welfare,  and  progress,  under 
the  exercise  of  the  police  power,  has  protected  the  work- 
ers from  the  unscrupulous  employer  whose  chief  purpose 
in  life  is  to  exploit  the  workers  for  selfish  gain,  and  has 
also  safeguarded  the  scrupulous  employer  from  destruc- 
tive competition  with  the  products  of  parasitic  and  anti- 


620  Labor  Legislation 

social  establishments.  The  scope  of  protective  laws  will 
have  to  be  extended,  however,  before,  children  will  be 
freed  from  the  necessity  of  industrial  employment,  and 
men  and  women  are  assured  reasonable  wages,  hours,  and 
conditions.  Without  going  to  a  dangerous  extreme, 
regulation  of  industry  can  function  in  the  true  interests 
of  human  welfare  and  social  progress. 


SELECTED  REFERENCES 

ADAMS,  T.  S.,  AND  SUMNEB,  H.  L..  Labor  Problems.  1905,  Chap. 

XXII. 
CARLTON,  F.  T.,  The  History  and  Problems  of  Organized  Labor, 

revised  edition,  1920,  Chap.  XI. 
CARLTON,  F.  T.,  Organized  Labor  in  American  History    1920, 

Chap.  VI. 
CHEYNEY,  E.  P.,  An  Introduction  to  the  Industrial  and  Social 

History  of  England,  revised  edition,  1920,  Chaps.  VIII-XII. 
CLARK,  L.  D.,  Minimum  Wage  Laws  in  the  United  States,  Monthly 

Labor  Review,  12 :1-20,  March,  1921. 

COMMONS,  J.  R.,  AND  ANDREWS,  J.  B.,  Principles  of  Labor  Legis- 
lation, revised  edition,  1920,  Chaps'.  I— VII. 
CUSHMAN,  R.  E.,  Studies  in  the  Police  Power  of  the  National 

Government,  Minnesota  Law  Review,  Vols.  Ill   (1919)   and 

IV  (1920). 
DOUGLAS,  D.  W.,  American  Minimum  Wage  Laws  at  Work,  Amer. 

Econ.  Rev.,  9:701-738,  Dec.,  1919. 

FRANKFURTER,  FELIX,  Hours,  of  Labor  and  Realism  in  Constitu- 
tional Law,  Harvard  Law  Review,  29 :353-373,  1916. 
FREUND,  ERNST,  The  Police  Power,  1904. 
HIGGINS,  H.  B.,  A  New  Province  for  Law  and  Order,  Harvard 

Law  Review,  29:13-39,  1915. 
HOXIE,   R.    F.,    Trade    Unionism    in    the    United   States,    1917, 

Chap.  IX. 
POUND,  ROSCOE,  Liberty  of  Contract,  Yale  Law  Journal,  18 :454- 

487,  1909. 
POWELL,  T.  R.,  Collective  Bargaining  Before  the  Supreme  Court, 

Pol.  Sci.  Quarterly,  33:396-429,  1918. 
SEAGER,  H.  R.,  Principles  of  Economics,  revised  edition,  1917, 

Chap.  XXX. 


CHAPTER  XXVI 
SOCIAL  INSURANCE 

The  Nature  of  Social  Insurance. — The  term  "  social  in- 
surance" refers  to  various  schemes  organized  by  the  state 
to  compensate  the  working  classes  for  losses  sustained 
chiefly  in  the  course  of  industrial  life.  Collective  respon- 
sibility is  substituted  for  individual  responsibility  in  the 
assumption  of  financial  burdens  that  would  otherwise  fall 
upon  certain  individuals;  the  accumulation  of  funds  en- 
ables the  group  to  aid  unfortunate  members  in  distress. 
The  exigencies  that  necessitate  assistance  include  sick- 
ness, accident,  unemployment,  invalidity,  and  old  age; 
and  various  forms  of  social  insurance  are  devised  to  take 
care  of  these  emergencies. 

Employers'  Liability. — The  principles  of  the  common 
law  governing  the  liability  of  employers  for  industrial 
accidents  include:  (1)  the  reasonable  duties  of  the  em- 
ployer, (2)  the  burden  of  occupational  risks,  (3)  the 
assumption  of  occupational  hazards,  (4)  the  responsibility 
of  fellow  servants,  and  (5)  the  contributory  negligence 
of  the  injured  workman.  The  common  law  imposes  upon 
the  employer  the  duty  of  exercising  care  in  safeguarding 
his  employees  from  injury,  that  is,  the  provision  of  a  safe 
place  of  employment,  safe  tools  and  equipment,  intelligent 
and  adequate  supervision,  and  competent  fellow  workers. 
Having  taken  these  precautions,  the  employer  is  freed  from 
responsibility  for  injuries  arising  from  (a)  the  ordinary 
risks  of  the  occupation,  (b)  the  extraordinary  dangers  of 
employment,  (c)  the  carelessness  and  negligence  of  fellow 
workmen,  and  (d)  the  worker's  own  carelessness  and 
negligence. 

The  application  of  unmodified  common-law  doctrines 
of  employers'  liability  imposes  immeasurable  hardships 

621 


622  Social  Insurance 

upon  the  injured  workman  and  his  dependents,  and  re- 
sults in  great  injustice.  In  spite  of  any  precautions  that 
employers  may  take,  numerous  accidents  inevitably  occur 
in  the  complex  processes  of  machine  industry.  Wage- 
earners  must  work  to  live  and  are  not  economically  free 
to  refuse  employment  on  account  of  actual  or  potential 
risks  connected  with  the  job,  even  though  they  may  be 
fully  aware  of  such  dangers.  To  make  them  both  physi- 
cally and  financially  responsible  for  implied  or  assumed 
risks  is  manifestly  unjust.  That  principle  is  equally  in- 
defensible which  allows  the  workers  to  bear  the  burden 
of  accidents  resulting  from  the  negligence  of  fellow 
servants,  whom  they  do  not  choose  and  for  whose  actions 
they  cannot  be  responsible.  Contributory  negligence  is 
difficult  to  prove  and  results  in  prolonged  and  expensive 
litigation.  Moreover,  employers  have  often  abused  this 
doctrine  by  attributing  all  accidents  to  the  injured  work- 
man's own  carelessness. 

The  application  of  common-law  rules  results  in 
enormous  financial  waste.  To  secure  damages  the  injured 
workman  must  resort  to  a  suit  at  law.  Here  he  is  at 
a  decided  disadvantage,  because  litigation  is  expensive 
and  the  outcome  always  uncertain.  Employers  have  been 
able  to  escape  the  burden  of  damages  by  engaging  liability 
insurance  companies  to  carry  the  risks  in  return  for  the 
payment  of  a  stipulated  annual  premium.  It  is  to  the 
advantage  of  these  companies  to  oppose  the  injured  work- 
man's claim,  and  this  they  do  successfully  by  employing 
expert  legal  advice.  The  worker  cannot  afford  to  engage 
expert  attorneys,  and  defeat  is  almost  inevitable.  Should 
the  worker  win  his  suit,  the  amount  of  damages  that 
actually  reaches  him  is  pitiably  small.  It  has  been  es- 
timated that  out  of  every  $100  paid  by  the  employer  as 
a  premium,  only  $28  reaches  the  injured  employee,  and 
this  only  after  a  period  of  litigation  of  two  to  six  years. 
It  is  not  surprising  that  comparatively  few  injured  work- 
men contest  their  cases  under  the  common  law. 

Social  and  economic  justice  demands  that  injured  work- 
men shall  be  relieved  from  the  financial  burden  of  acci- 


Social  Insurance  623 

dents;  that  modern  industry  shall  provide,  in  addition 
to  a  living  wage,  adequate  surgical  and  medical  care  for 
injured  employees;  and  that  money  compensation  shall 
be  sufficient  to  maintain  the  injured  workmen  and  their 
dependents  during  periods  of  disability.  Industrial  acci- 
dents and  occupational  diseases  are  just  as  legitimately 
a  part  of  the  cost  of  production  as  the  wear  and  tear 
on  machinery,  or  any  other  form  of  depreciation  that 
calls  for  replacement.  The  expense  is  borne  immediately 
by  the  employer,  but  ultimately  by  the  consumer.  Indus- 
tries that  refuse  to  include  these  human  values  in  their 
costs  of  operation  are  parasitic,  and  consumers  who  are 
unwilling  to  pay  prices  sufficient  to  cover  these  risks  are 
not  entitled  to  the  utilities. 

Workmen's  Compensation  Laws. — 1.  Development. — 
Definite  legal  provision  for  injured  workmen  was  first 
made  in  Germany,  the  pioneer  in  most  forms  of  social 
insurance,  where  compulsory  insurance  against  accidents 
became  effective  in  1885.  Great  Britain  enacted  a  law 
in  1897,  giving  similar  protection,  and  in  1906  provision 
was  made  to  cover  occupational  diseases.  At  present  the 
British  law  covers  no  less  than  twenty-eight  occupational 
maladies.  Other  European  countries,  the  Australasian 
commonwealths,  and  Canada  followed  the  example  of 
Germany  and  Great  Britain. 

The  United  States  lagged  behind  European  countries 
in  enacting  workmen's  compensation  laws.  Among  the 
reasons  for  this  tardy  development  were:  (1)  the  em- 
ployers' fear  that  such  laws  would  increase  greatly  the 
cost  of  production,  and  injure  them  in  competition  with 
producers  not  subject  to  these  added  costs ;  (2)  the  general 
suspicion  that  compulsory  compensation  would  encourage 
malingering  among  injured  workers;  (3)  the  indifferent 
attitude  of  organized  labor,  which  preferred  that  such 
protection  be  provided  by  voluntary  action ;  (4)  the  tradi- 
tional American  suspicion  that  such  a  measure  constitutes 
a  step  towards  state  socialism;  (5)  the  general  ignorance 
of  the  public  concerning  the  necessity  and  value  of  such 
laws;  and  (6)  the  fear  of  state  governments  that  the 


624  Social  Insurance 

enactment  of  compulsory  accident  insurance  laws  would 
drive  established  industries  out  of  the  state  and  prevent 
the  development  of  new  industries. 

These  various  objections  were  gradually  overcome.  In 
1902  Maryland  enacted  the  first  law  providing  compensa- 
tion for  injuries,  but  this  measure  was  declared  uncon- 
stitutional in  1904.  The  employees  of  the  government  of 
the  Philippines  were  included  in  a  compensation  act 
passed  by  the  United  States  Philippine  Commission,  in 
1906.  In  1908  Congress  passed  "a  law  providing  accident 
compensation  for  certain  federal  employees.  The  Mon- 
tana law  of  1910,  which  provided  compensation  for 
miners,  was  held  unconstitutional.  In  1911  the  New  York 
law,  passed  in  1910,  was  declared  invalid,  but  an  amend- 
ment to  the  state  constitution  made  possible  the  enact- 
ment of  a  compulsory  workmen's  compensation  act  in 
1914.  Beginning  with  the  enactment  of  compensation 
laws  in  California,  New  Jersey,  Washington,  and  Wis- 
consin in  1911,  the  movement  spread  rapidly,  and  by  1922 
similar  laws  had  been  passed  in  forty-three  states,  and  the 
territories  of  Alaska,  Hawaii,  and  Porto  Rico.  In  1916, 
moreover,  the  federal  government  replaced  the  1908  com- 
pensation law  by  a  comprehensive  measure  covering  all 
of  its  civilian  employees.  Ai  Kansas,  Florida,  North  Caro- 
lina, South  Carolina,  and  the  District  of  Columbia  are 
the  only  jurisdictions  without  such  laws. 

2.  General  Nature. — (a)  Scope. — The  inclusiveness  of 
workmen's  compensation  laws  varies  with  the  different 
states.  Some  laws  cover  practically  the  whole  range  of 
industrial  employments  while  others  are  limited  to  what 
are  commonly  known  as  hazardous  or  extrahazardous 
occupations.  Domestic  service,  farm  work,  and  other  so- 
called  nonhazardous  employments  are  generally  excluded. 
Railroad  employees  engaged  in  interstate  commerce  come 
under  the  federal  act,  and  casual  employees  are  not 
usually  included.  Public  employees,  employers  having 
only  a  few  workers,  and  enterprises  not  conducted  for 
gain  are  excluded.  The  laws  of  several  states  specifically 
provide  or  imply  that  occupational  diseases  shall  be  con- 


Social  Insurance  625 

sidered  injuries.  The  percentage  of  employees  covered 
by  the  different  laws  range  from  about  20  per  cent  in 
Porto  Rico  to  almost  100  per  cent  in  New  Jersey.  In 
fourteen  states  less  than  50  per  cent  of  the  workers  are 
covered. 

(b)  Methods  of  Carrying  Insurance. — Four  main  methods 
of  carrying  insurance  are  provided  under  the  various 
laws;  namely,  exclusive  state  fund,  competitive  state 
fund,  private  insurance — either  stock  or  mutual — and 
self-insurance.  Most  states  provide  for  the  carrying  of 
insurance  in  a  state  fund.  In  some  states  it  is  compulsory 
for  all  employers  coming  within  the  act  to  insure  in  this 
fund,  while  in  others  insurance  is  permitted  in  private 
stock  or  mutual  companies.  Under  the  system  of  self- 
insurance  the  employer  carries  his  own  risk,  but  is  re- 
quired to  give  proof  of  his  financial  solvency  and  ability 
to  pay  compensation.  Mutual  companies  and  state  funds 
have  proved  the  most  satisfactory.  Stock  companies  are 
operated  for  profit.  They  are  interested  in  paying 
dividends  to  stockholders,  their  expenses  are  very  high 
because  of  the  cost  of  soliciting  business  and  collecting 
premiums,  and  their  savings  in  no  way  benefit  the  em- 
ployers who  are  insured  with  them.  This  is  especially 
true  of  the  nonparticipating  companies.  Mutual  com- 
panies are  operated  for  the,  protection  of  policy  holders 
who,  as  members,  receive  the  benefits  that  accrue  from 
operation.  Because  of  their  low  cost  of  operation,  mutual 
companies  have  been  able  to  sell  insurance  at  rates  about 
twenty-five  per  cent  lower  than  stock  companies. 

When  the  state  becomes  the  sole  insurance  carrier,  it 
classifies  industries  into  groups  according  to  hazard,  fixes 
and  collects  premiums,  adjudicates  claims,  and  pays  com- 
pensation. State  funds  are  gaining  favor  because  of  their 
economy  of  operation,  insignificant  losses,  and  large  sav- 
ings. In  Ohio  it  has  been  found  that  forty  cents  of  every 
dollar  collected  by  private  insurance  companies  is  ab- 
sorbed by  overhead  expenses,  whereas  the  whole  income 
of  the  state  fund  is  devoted  exclusively  to  the  payment 
of  compensation  claims.  In  the  first  five  years  of  its 


626  Social  Insurance 

operation  the  State  fund  of  New  York  saved  to  insurers 
over  $4,000,000,  or  29  per  cent  of  the  total  premiums 
computed  at  company  rates,  which  meant  that  the  in- 
surers in  stock  companies  paid  an  unnecessary  cost  in 
excess  of  $18,000,000  for  the  period.  An  investigation  of 
compensation  insurance  systems  made  by  the  United 
States  Bureau  of  Labor  Statistics  in  twenty-one  states 
and  two  Canadian  provinces  in  1919  showed  that  stock 
companies  wrote  about  $99,000,000  in  premiums,  mutual 
companies  $27,000,000,  and  state  funds  $33,000,000.  State 
funds  were  judged  superior.  The  average  expense  ratio 
of  stock  companies  was  approximately  37  per  cent;  of 
mutual  companies,  20  per  cent ;  of  competitive  state  funds, 
about  12  per  cent;  a,nd  of  exclusive  state  funds,  from 
5  to  7^  per  cent.  Under  the  exclusive  state  fund  the 
cost  to  employers  would  be  30  per  cent  less  than  under 
stock  insurance,  and  more  than  12  per  cent  less  than 
under  mutual  insurance.  The  total  saving  to  insured 
employers  in  the  United  States  through  the  exclusive  use 
of  state  funds  would  be  over  $30,000,000  annually.  From 
the  standpoint  of  liberality,  efficiency  of  administration, 
solvency,  economy,  and  promptness  of  payments,  state 
funds  are  superior.  Hundreds  of  thousands  of  unpaid 
claims  have  resulted  from  the  failure  of  stock  companies 
during  the  last  few  years,  while  not  a  cent  has  been  lost 
through  the  insolvency  of  state  funds.1 

(c)  Benefits. — The  amount  of  benefits  paid  for  total 
disability  varies  in  the  different  states.  In  most  states 
a  percentage  of  the  wages  earned  at  the  time  of  accident 
is  granted,  the  total  ranging  from  50  to  66%  per  cent. 
This  scale  of  compensation  benefits,  however,  is  modified 
by  weekly  maximum  and  minimum  limits  which  affect 
greatly  the  amount  received.  Only  a  few  states  have  a 
maximum  of  $20  or  over,  most  of  them  putting  the  limit 
at  about  $10  or  $15.  At  least  twenty  states  and  the 
federal  government  provide  that  payments  for  permanent 

*Carl  Hookstadt,  "Comparison  of  Compensation  Insurance  Systems 
as  to  Cost,  Service,  and  Security, ' '  Monthly  Labor  Eeview,  December, 
1920,  pp.  135-156. 


Social  Insurance  627 

total  disability  shall  continue  during  the  injured  worker's 
life.  In  most  states  time  limitations  for  permanent  total 
disability  range  from  208  to  550  weeks,  and  money  limita- 
tions from  $3,000  to  $6,000,  although  in  Minnesota  the 
maximum  is  $10,000.  For  partial  disability  most  states 
provide  for  the  payment  of  a  percentage  of  wages  for  a 
certain  number  of  weeks,  depending  upon  the  nature  of 
the  injury.  In  Illinois,  for  example,  the  number  of  weeks 
for  which  compensation  is  payable  is  200  for  the  loss 
of  an  arm,  150  for  a  hand,  60  for  a  thumb,  15  to  35  for 
a  finger,  175  for  a  leg,  125  for  a  foot,  10  to  30  for  a  toe, 
and  100  for  the  sight  of  one  eye.  Many  states  provide 
also  for  the  loss  of  hearing. 

In  the  case  of  death,  benefits  in  most  instances  consist 
of  about  three  or  four  years'  earnings  of  the  deceased 
employee.  The  majority  of  states  provide  a  wage  perr 
centage  for  a  period  of  300  to  500  weeks,  but  several 
states  and  the  federal  government  pay  benefits  until  'the 
death  or  remarriage  of  the  widow.  About  half  of  the 
states  limit  the  maximum  amount  payable  in  any  one 
case,  the  amount  ranging  from  $3,000  to  $6,000.  The 
accident  laws  of  most  states  now  provide  for  medical 
attention  of  two  weeks  to  ninety  days,  but  a  few  laws 
specify  no  limit.  Although  about  twelve  states  put  no 
limit  on  the  money  expenditure  for  medical  attention, 
most  states  have  a  maximum  of  $50  to  $600.  Compensa- 
tion laws  usually  require  that  no  monetary  benefits  shall 
be  paid  for  a  specified  period  after  the  occurrence  of  the 
accident.  TJiis  waiting  period  is  intended  to  prevent 
malingering  and  ranges  from  several  days  to  two  weeks. 
It  is  estimated  that  not  less  than  $200,000,000  is  paid 
out  annually  in  workmen's  compensation  in  the  United 
States. 

(d)  Administration. — Tho  administration  of  workmen's 
compensation  acts  may  be  effected  in  one  of  two  ways. 
There  may  be  a  central  administrative  board  entrusted 
with  the  general  powers  of  enforcing  the  law,  or  all 
questions  and  controversies  arising  tinder  the  statute  may 
be  left  to  the  adjudication  of  the  courts.  Most  states 


628  Social  Insurance 

have  provided  definite  administrative  commissions,  while 
less  than  one-fourth  adhere  to  the  antiquated  procedure 
of  entrusting  administration  and  decision  to  the  courts. 
The  courts  are  not  equipped  to  administer  such  laws,  and 
legal  procedure  is  extremely  slow  and  expensive.  In- 
vestigation, review,  and  decision  by  expert  and  responsible 
administrative  agencies  are  necessary  to  insure  the  in- 
jured workman  his  full  rights  under  the  law. 

(e)  Tendencies  and  Improvements. — Definite  improve- 
ments are  found  in  the  form  of  increased  benefits,  short- 
ening the  waiting  period  to  one  week  or  less,  provision 
of  state  funds,  and  inclusion  of  occupational  diseases. 
The  tendency  is  to  pay  benefits  of  two-thirds  of  the  wage 
earned  by  the  injured  employee.  Many  states  are  taking 
advantage  of  the  federal  civilian  rehabilitation  law  of 
1920,  to  provide  for  the  industrial  rehabilitation  of  crip- 
pled workers.  A  necessary  improvement  yet  to  be  made 
in  the  majority  of  the  laws  is  the  removal  of  limitations 
on  occupations  covered,  medical  benefits,  and  periods  of 
payment  in  case  of  death  or  total  disability.  Administra- 
tion must  be  taken  out  of  the  hands  of  the  courts, 
greater  uniformity  introduced,  and  laws  enacted  in  back- 
ward states. 

Health  Insurance. — 1.  Germany. — The  German  system 
of  health  insurance  dates  back  to  1883,  but  it  has  been 
modified  several  times  and  now  applies  to  about  two- 
thirds  of  the  gainfully  employed,  or  20,000,000  persons. 
Employers  contribute  one-third  of  the  premiums,  and  they 
deduct  the  other  two-thirds  from  the  employees'  wages. 
Illness  insurance  stamps  are  purchased  by  the  employers 
from  the  post  office  and  each  week  are  attached  to  the 
insurance  cards  of  the  workers.  These  cards  serve  as 
evidence  of  the  good  standing  of  the  insured.  Benefits 
in  case  of  illness  include  free  medical  attention,  hospital 
treatment,  medicines,  and  appliances,  such  as  spectacles, 
crutches,  and  artificial  limbs ;  50  per  cent  of  wages  after 
the  third  day  of  illness,  and  extending  for  a  total  period 
of  twenty-six  weeks  if  necessary;  twenty  times  the  aver- 
age wage  as  a  funeral  benefit;  maternity  benefits  for  a 


Social  Insurance  629 

period  of  six  weeks  after  confinement ;  and  a  certain  sum 
as  a  pension  for  the  surviving  widow  and  orphans.  The 
administration  of  this  system  is  in  the  hands  of  the 
National  Insurance  Office,  functioning  through  sick-bene- 
fit associations  controlled  by  joint  committees  of  em- 
ployers, employees,  and  disinterested  citizens. 

2.  Great  Britain. — The  Health  Insurance  Act  of  Great 
Britain,  which  was  passed  in  1911,  has  been  amended 
several  times  and  in  1920  was  greatly  modified.  This 
law  includes  all  manual  workers  between  the  ages  of 
16  and  70,  and  nonmanual  workers,  such  as  clerks  and 
agents,  whose  earnings  are  less  than  £250  ($1,250)  per 
annum.  Other  citizens  may  join  as  "voluntary  contribu- 
tors, ' '  but  their  premiums  are  reduced  because  they  receive 
no  medical  benefits.  Men  pay  10  pence  (20  cents)  a 
week,  of  which  the  employer  pays  5  pence  and  the  worker 
5  pence.  To  these  amounts  the  state  adds  a  sum  equal 
to  two-ninths  of  the  total.  Women  pay  9  pence  (18  cents) 
a  week,  of  which  the  employer  pays  5  pence  and  the 
female  worker  4  pence;  to  this  amount  the  state  adds 
a  sum  equivalent  to  one-fourth  of  the  total.  Contribu- 
tions are  made  through  the  employer,  who  buys  insurance 
stamps  at  the  post  office.  Each  week  he  is  required  to 
attach  these  stamps  to  the  insured  employee's  card  as 
evidence  of  payment.  If  the  employer  has  more  than  100 
workers  he  may  stamp  the  card  every  six  months. 

A  male  worker  who  is  certified  by  a  physician  as  "in- 
capable of  employment"  on  account  of  illness  is  entitled 
to  15  shillings  ($3.75)  a  week,  which  begins  after  a  three- 
day  waiting  period  and  continues  for  26  weeks  if  neces- 
sary. For  disability  that  extends  beyond  this  period  he 
receives  7  shillings  and  6  pence  ($1.88)  a  week  so  long 
as  he  is  unable  to  work.  The  benefit  for  female  workers 
is  12  shillings  ($3.00)  a  week,  with  the  same  disability 
benefit  as  in  the  case  of  men.  Thus,  flat  premiums  and 
uniform  benefits  are  provided  regardless  of  differences 
in  wages.  Eligibility  for  these  benefits  depends  upon  the 
payment  of  premiums  for  26  weeks,  and  a  worker  is 
judged  in  arrears  if  premiums  are  not  paid  for  at  least 


630  Social  Insurance 

48  weeks  in  the  insurance  year.  He  must  then  pay  up 
or  be  declared  ineligible.  A  married  woman  is  entitled 
to  40  shillings  ($10)  at  confinement  if  she  is  an  insured 
wage-earner  or  the  wife  of  an  insured  employee;  if  both 
husband  and  wife  are  employed  the  maternity  benefit  is 
doubled. 

All  cash  benefits  are  paid  through  the  local  officer  of 
an  approved  society.  Medical  attendance  is  provided  in 
cases  of  illness,  except  confinement.  Medicines  and  ap- 
pliances are  also  furnished,  but  there  is  no  statutory  provi- 
sion for  hospital  service,  nurses,  dental  care,  specialists' 
attention,  and  medical  attendance  upon  dependents.  The 
.  worker  may  choose  his  own  society,  and  may  insure  with 
an  approved  commercial  company,  friendly  benefit  society, 
trade  union,  an  establishment  fund,  or,  if  he  is  a  deposit 
contributor  belonging  to  no  society,  he  can  hold  his  own 
card  and  buy  stamps  at  the  post  office.  Approved  societies 
are  not  profit-making  organizations.  Complaints  may  be 
filed  against  unsatisfactory  medical  service.  Central  ad- 
ministration is  vested  in  a  division  of  the  Ministry  of 
Health.  The  British  system  is  of  immeasurable  value  to 
the  workers  and  now  aids  at  least  16,000,000  employees. 

3.  United  States. — Official  investigations  have  shown  that 
about  20  per  cent  of  the  wage-earners  of  the  United  States 
are  ill  each  year  for  an  average  of  about  35  days,  but 
the  movement  for  compulsory  health  insurance  has  made 
little  progress.  There  are  evidences  of  an  awakening 
public  opinion,  however,  and  bills  have  been  introduced 
into  several  state  legislatures.  In  1919  the  New  York 
senate  voted  favorably  on  a  measure,  but  it  failed  to 
become  a  law.  These  bills  provide  for  medical  and 
surgical  attention,  medicine  and  appliances ;  a  cash  benefit 
of  approximately  75  per  cent  of  the  insured  workers' 
wages,  to  continue  26  weeks  if  necessary;  special  ma- 
ternity benefits  for  two  weeks  preceding,  and  six  weeks 
following  childbirth;  and  certain  funeral  benefits.  The 
cost  of  insurance  is  to  be  shared  equally  by  the  employer 
and  employee,  and  the  state  is  to  bear  the  expense  of 
central  supervision.  Actual  administration  is  to  be  left  to 


Social  Insurance  631 

local  mutual  associations,  managed  democratically  by 
employers  and  employees  under  state  control.  Wage- 
earning  mothers  will  share  in  the  benefits  of  the  ma- 
ternity and  infant  hygiene  law  passed  by  the  federal 
government  in  1921. 

Old  Age  Pensions. — There  is  no  sadder  evidence  of  the 
failure  of  our  industrial  system  to  assure  justice  than  the 
presence  of  a  large  number  of  aged  wage-earners  who, 
after  a  life  of  steady,  productive  effort,  find  themselves 
relegated  to  the  scrap  heap  with  no  means  of  support 
except  the  generosity  of  relatives  or  humiliating  charity. 
The  pressure  of  immediate  wants  and  the  meagerness 
of  their  incomes  have  made  it  impossible  to  put  aside  an 
amount  sufficient  to  keep  them  in  their  declining  years. 
Some  form  of  collective  insurance  or  pension  is  necessary, 
if  wage-earners  are  to  spend  old  age  in  the  comfort  which 
should  attend  it.  A  very  small  proportion  of  national 
fraternal  benefit  societies,  and  only  a  few  national  trade 
unions,  such  as  the  International  Typographical  Union 
and  the  Granite  Cutters'  International  Association,  pro- 
vide pensions  for  American  wage-earners. 

Three  forms  of  social  insurance  covering  dependency 
In  old  age  may  be  noted.  (1)  State  subsidies  may  be 
established,  under  which  the  government  grants  certain 
subventions  to  friendly  benefit  societies  that  operate  pen- 
sion systems  for  their  members.  The  state  exercises 
supervision  over  these  organizations  and  the  expenditure 
of  funds.  This  form  of  insurance  has  covered  only  a 
small  proportion  of  the  wage-earners,  and  cannot  be  re- 
garded as  very  promising.  (2)  Compulsory  contributory 
insurance  may  be  provided,  by  which  the  workers  pay 
a  premium  to  aid  in  building  up  the  insurance  fund.  (3) 
Gratuitous  or  noncontributory  pensions  may  be  granted 
to  indigent  aged  workers  under  certain  conditions.  The 
last  two  have  been  applied  most  successfully.  Compulsory 
old  age  and  invalidity  insurance  has  been  introduced  in 
about  a  dozen  European  countries,  and  in  the  United 
States  for  all  employees  of  the  federal  government  who 
are  on  classified  civil  service  lists. 


632  Social  Insurance 

Germany  blazed  the  trail  for  old  age  insurance,  in  the 
act  of  1889.  Contributions  are  graded  according  to  the 
workers'  income  and  fall  into  five  classes,  the  premiums 
ranging  from  4  cents  to  12  cents  a  week;  the  employer 
and  employee  contribute  equal  amounts  and  the  state 
adds  a  definite  amount  for  each  individual  receiving  a 
pension.  Premiums  must  be  paid  for  a  minimum  of  1,200 
weeks.  The  employer  is  made  responsible  for  the  collec- 
tion of  payments,  which  he  deducts  from  the  wages  of 
eligible  workers.  Upon  attaining  the  age  of  sixty-five, 
the  worker  is  entitled  to  claim  a  pension,  the  amount 
depending  upon  the  group  in  which  he  is  classified.  In- 
validity insurance  benefits  are  provided  for  insured  per- 
sons who,  because  of  illness,  are  incapable  of  earning 
one-third  of  the  wages  ordinarily  paid  to  normal  in- 
dividuals in  their  occupation.  These  benefits  are  larger 
than  the  pensions,  and  there  are  provisions  for  sanatorium 
treatment. 

Compulsory  contributory  old  age  and  invalidity  in- 
surance for  classified  civil  service  employees  of  the  federal 
government  of  the  United  States  was  introduced  by  an 
act  passed  in  1920.  Fifteen  years  of  government  service 
is  required  as  a  condition  of  eligibility  to  pension  under 
this  measure.  Retirement  is  permitted  at  the  age  of  sixty- 
two,  for  railway  mail  employees ;  sixty-five,  for  mechanics, 
letter  carriers,  and  post-office  clerks;  and  seventy,  for 
all  other  employees.  The  yearly  pension  ranges  from 
$180  to  $720,  depending  upon  the  salary  previously 
earned,  and  the  length  of  service.  Permission  may  be 
obtained  to  continue  employment  for  two  periods  'of  two 
years  each  beyond  the  retirement  age.  Employees  who 
have  served  fifteen  years,  but  become  incapacitated  for 
work  prior  to  the  retirement  age  are  given  the  same 
benefits,  provided  incapacity  is  not  due  to  vicious  habits, 
intemperance,  or  willful  misconduct.  Contributions  made 
by  employees  under  this  law  consist  of  a  2l/2  per  cent 
deduction  from  all  salaries.  This  is  estimated  to  meet 
about  one-third  of  the  expense  of  administration,  the 
remainder  being  paid  by  the  government  out  of  general 


Social  Insurance  633 

taxes.  Kepayment  of  premiums  at  4  per  cent  interest, 
compounded  annually,  is  made  in  the  case  of  all  those 
who  leave  the  service  of  the  government  or  die  prior  to 
completion  of  the  period  of  service  required  for  a  pension. 
The  act  is  administered  by  the  Commissioner  of  Pensions 
and  the  Secretary  of  the  Interior.  In  addition  to  the 
federal  government,  many  states  have  passed  laws  per- 
mitting counties  and  municipalities  to  establish  annuity 
and  benefit  funds  for  their  employees. 

Noncontributory  old  age  pensions  are  provided  in 
several  countries,  including  Great  Britain,  Australia,  New 
Zealand,  and  France.  In  addition  to  a  definite  period 
of  residence  and  citizenship,  certain  moral,  economic,  and 
civil  qualifications  are  required  under  these  measures. 
Under  the  provisions  of  the  British  laws  of  1908  and 
1911,  as  amended  in  1919,  the  government,  without  re- 
quiring contributions  from  the  workers  or  the  employers, 
gives  a  pension  to  all  meritorious  and  necessitous  persons 
who  have  reached  the  age  of  seventy,  and  have  been 
citizens  twenty  years.  Persons  incapacitated  by  blindness 
resulting  from  their  occupation  are  entitled  to  the  old  age 
pension  at  fifty  years  of  age.  To  be  eligible  for  a  pension  a 
person  must  show  that  he  has  not  failed  to  work  according 
to  his  ability  and  opportunity  to  maintain  himself  and 
family,  and  that  he  has  not  within  ten  years  been  con- 
victed of  a  prison  offense.  Originally,  persons  who  had 
received  poor  relief  other  than  medical  and  surgical  help 
were  denied  pensions,  but  the  1919  amendment  strikes  out 
this  provision.  Lunatics  and  inebriates  are  excluded,  but 
no  person  can  be  denied  the  privileges  of  the  act  who 
for  ten  years  prior  to  attaining  the  age  of  sixty  has  made 
regular  contributions  to  a  trade  union  maintaining  benefit 
funds.  Formerly,  persons  whose  incomes  exceeded 
£31.10.0  ($160)  per  annum  were  not  entitled  to  a  pension, 
but  the  recent  amendment  advanced  the  sum  to  £49.17.6 
($250).  This  change  has  brought  within  the  act  an  addi- 
tional 220,000  persons.  The  maximum  amount  of  pension 
has  been  increased  from  5  shillings  ($1.25)  a  week  to 
10  shillings  ($2.50)  a  week.  Total  pensions  vary  accord- 


634  Social  Insurance 

ing  to  the  amount  of  income  received  from  other  sources, 
being  so  graduated  that  the  maximum  sum  of  20  shillings 
($5)  weekly  may  be  received  from  other  sources  plus  the 
pension  allowance.  Over  a  million  persons  are  recipients 
of  pensions,  two-thirds  of  whom  are  women.  Practically 
all  receive  the  maximum  pension  rate  of  ten  shillings  a 
week,  and  the  total  amount  paid  out  annually  in  pensions 
exceeds  £25,000,000  (roughly  $125,000,000). 

Noncontributory  pensions  have  not  been  widely  es- 
tablished in  the  United  States.  Arizona  passed  a  law  a 
few  years  ago,  which  was  later  held  unconstitutional. 
State  and  municipal  governments  often  provide  pensions 
for  certain  groups  of  employees,  such  as  teachers,  fire- 
men, and  policemen,  and  the  federal  government  has  al- 
ways had  a  comprehensive  system  of  pensions  for  war 
veterans.  Several  states,  including  Ohio  and  Pennsyl- 
vania, have  made  official  investigations  of  the  problem 
of  old  age  pensions.  The  need  for  some  kind  of  a  pension 
system  is  seen  from  the  fact  that  approximately  1,250,000 
of  the  population  of  the  United  States  above  sixty-five 
years  of  age  are  dependent  upon  public  and  private 
charity,  to  the  amount  of  about  $250,000,000  annually. 
Thus  far,  it  is  estimated,  one  person  in  eighteen  of  our 
wage-earners  reaches  the  age  of  sixty-five  in  penury,  and 
the  proportion  of  the  indigent  old  is  increasing. 

Contributory  pension  systems  have  been  opposed  be- 
cause they  involve  a  heavy  financial  burden  for  employers 
and  employees,  necessitate  a  bureaucratic  administration 
and  a  costly  accounting  system,  and  accumulate  in  the 
hands  of  the  government  large  sums  of  money  that  may 
be  applied  wastefully.  All  pension  systems,  contributory 
and  noncontributory,  have  been  condemned  on  the  ground 
that  they  discourage  thrift,  or  compete  with  private  sav- 
ings even  to  the  extent  of  making  such  saving  impossible. 
Experience  does  not  support  any  of  these  contentions. 
On  account  of  their  meagerness,  the  pension  payments 
most  assuredly  could  not  discourage  thrift. 

Mothers'  Pensions. — The  widows  and  orphans  of  wage- 
earners  are  benefited  materially  by  noncontributory 


Social  Insurance  635 

mothers'  pensions.  Such  pension  systems  have  been 
adopted  in  several  European  countries  and  New  Zealand, 
but  nowhere  has  the  movement  made  greater  progress 
than  in  the  United  States.  Up  to  the  present  time  (1922) 
forty  states,  in  addition  to  the  territories  of  Alaska  and 
Hawaii,  have  enacted  laws  providing  pensions  for  mothers. 
The  eight  states  that  have  no  laws  are  Alabama,  Georgia, 
Kentucky,  Mississippi,  New  Mexico,  North  Carolina, 
South  Carolina,  and  Rhode  Island.  No  uniformity  obtains 
in  the  provisions  of  the  various  statutes.  At  least  nine 
states  limit  the  payment  of  pensions  to  widows,  but  most 
states  grant  such  payments  to  mothers  with  dependent 
children.  The  pension  is  as  yet  very  inadequate  in  all 
states.  The  highest  allowances  are  made  in  Florida  and 
Nevada,  where  $25  a  month  is  granted  for  one  child ;  the 
lowest  payments  are  in  Delaware  and  New  Jersey,  which 
allow  only  $9  a  month ;  and  Iowa  and  Vermont,  which 
give  only  $2  a  week.  Payment  usually  ranges  between 
$12  and  $15;  smaller  allowances  are  often  provided  for 
each  additional  child. 

Unemployment  Insurance. — Of  all  forms  of  social  in- 
surance, unemployment  insurance  has  proved  the  most 
difficult  to  administer,  because  of  the  comparative  ease 
with  which  individuals  can  simulate  unemployment.  This 
is  probably  why  Germany,  the  pioneer  in  other  forms 
of  social  insurance,  has  not  provided  compulsory  unem- 
ployment insurance.  Labor  organizations  were  the  first 
to  provide  for  wage-earners  in  periods  of  unemployment. 
This  is  especially  true  of  European  organizations.  With 
the  exception  of  a  few  unions,  such  as  the  Cigarmakers' 
Union,  the  Moulders'  Union,  and  the  Diamond  Cutters' 
Union,  American  trade  unions  do  not  pay  traveling  ex- 
penses and  out-of-work  benefits  to  unemployed  members. 

Subsidies  are  often  granted  by  municipal  governments 
in  Europe  to  trade  unions,  for  the  purpose  of  promoting 
unemployment  insurance.  The  most  famous  of  these  plans 
is  the  "Ghent  System,"  established  by  the  Belgian  city 
of  Ghent  in  1901.  The  city  of  Ltege,  Belgium,  adopted 
a  plan  in  1897.  Under  the  Ghent  plan,  which  has  been 


636  Social  Insurance 

copied  by  a  great  many  municipalities  in  Europe,  sub- 
sidies are  granted  from  the  unemployment  fund  to  trade 
unions  which  have  a  definite  scheme  for  providing  out-of- 
work  relief,  the  subsidies  being  in  proportion  to  the  bene- 
fits paid  by  the  unions  to  unemployed  members.  A  sub- 
sidy is  also  granted  to  those  who  do  not  belong  to  a  trade 
union  or  an  association  providing  insurance  against  un- 
employment, but  who  insure  themselves  by  means  of 
deposits  at  a  savings  bank,  the  amount  of  the  subsidy 
being  proportionate  to  the  sum  withdrawn  from  these 
banks  by  insured  members.  Under  the  Ghent  system,  lock- 
outs and  strikes  are  not  considered  unemployment,  and 
the  municipality  adopts  a  policy  of  neutrality.  Under 
the  Liege  plan,  lockouts  are  accepted  as  sufficient  reason 
for  unemployment  subsidy.  The  subventions  granted  by 
European  municipalities  vary  from  one-third  to  the  full 
amount  of  the  benefits  paid  by  trade  unions.  Great  Bri- 
tain has  subsidized  unions  not  acting  under  the  compul- 
sory unemployment  insurance  act  of  1911,  provided  they 
pay  out-of-work  relief. 

Compulsory  unemployment  insurance  has  been  adopted, 
in  only  a  few  countries.  Although  this  form  of  insurance 
was  first  established  in  the  municipality  of  St.  Gall, 
Switzerland,  in  1894,  it  remained  for  Great  Britain  to 
evolve  a  successful  scheme.  The  British  unemployment 
insurance  act  went  into  effect  July  15,  1912.  Italy  put 
a  similar  measure  into  operation  on  January  1,  1920.  The 
British  system  has  been  modified  considerably  by  subse- 
quent laws.  The  original  law  applied  to  only  a  limited 
number  of  trades  and  included  about  2,500,000  workers. 
In  1920  a  new  unemployment  insurance  act  was  passed 
which  includes  practically  all  manual  and  nonmanual 
workers  whose  earnings  do  not  exceed  £250  ($1,250)  per 
annum,  but  excludes  those  engaged  in  agriculture  and 
domestic  service.  Approximately  12,000,000  are  covered, 
of  whom  8,333,000  are  men,  and  3,430,000  are  women. 
The  insurable  age  is  sixteen  years,  and  there  is  no  upper 
limit  except  in  the  case  of  pensioners.  New  measures 
passed  in  1921  made  certain  changes  with  regard  to 


Social  Insurance  637 

premiums  and  benefits.  At  the  present  time  the  joint 
contributions  of  employers  and  employees  are  Is.  3d.  (30 
cents)  a  week  in  the  case  of  men,  and  Is.  Id.  (26  cents) 
in  the  case  of  women.  The  benefits  are  15s.  ($3.75)  for 
men  and  12s.  ($3.00)  for  women.  Lower  premiums  and 
benefits  obtain  in  the  case  of  boys  and  girls. 

The  normal  period  during  which  unemployment  benefits 
may  be  drawn  is  twenty-six  weeks  in  any  one  year,  although 
in  emergencies  two  additional  periods  of  six  weeks  have 
been  allowed.  The  waiting  period  is  six  days.  Employees 
are  protected  by  the  provision  that  an  unemployed  person 
is  not  compelled  to  accept  work  in  an  establishment  where 
there  is  an  industrial  dispute,  nor  at  wages  less  than 
the  local  scale  for  his  occupation.  Employers  are  pro- 
tected by  the  provision  that  workers  are  not  granted 
benefits  if  they  strike,  leave  employment  without  sufficient 
cause,  or  are  discharged  for  bad  conduct  or  inefficiency. 
To  stabilize  production  and  reduce  unemployment  to  a 
minimum,  a  refund  of  one-third  of  his  own  contributions 
is  given  to  the  employer  for  each  employee  assured  work 
for  not  less  than  forty-five  weeks  in  a  year.  Insured 
workmen  over  sixty  years  of  age,  who  have  been  insured 
for  ten  years  and  have  paid  five  hundred  contributions, 
are  entitled  to  a  refund  of  their  total  premiums  minus 
total  benefits  received,  with  interest  compounded  at  2^ 
per  cent.  The  applicant  for  unemployment  insurance 
must  prove  that  he  is  normally  engaged  in  insurable  em- 
ployment, and  that  he  is  genuinely  seeking  whole-time 
work  but  is  unable  to  find  it. 

Unemployment  books  are  furnished  the  workers,  who 
deposit  them  with  the  employer  upon  being  hired.  On 
pay-day  the  employer  affixes  stamps  representing  the 
combined  value  of  his  own  and  the  employee's  con- 
tribution, deducting  the  latter  from  the  worker's  wage. 
Stamps  are  purchased  by  the  employer  from  the  post 
office,  and  money  thus  collected  is  forwarded  to  the  un- 
employment insurance  fund.  When  the  worker  is  out 
of  employment  he  obtains  his  book  from  the  employer 
and  deposits  it  with  the  nearest  labor  exchange  or  in- 


638  Social  Insurance 

surance  office,  thus  becoming  registered  as  unemployed. 
It  is  difficult  to  exploit  the  insurance  fund  because  the 
worker,  except  under  conditions  already  mentioned,  must 
accept  employment  furnished  him  by  the  exchange.  Effi- 
cient administration  of  the  law  is  made  possible  by  the 
comprehensive  system  of  employment  exchanges. 

Although  the  United  States  has  no  state  or  national 
system  of  unemployment  insurance,  several  experiments 
are  being  tried  in  industry.  Perhaps  the  most  interesting 
of  these  is  the  "Cleveland  Plan"  which  has  been  instituted 
in  the  ladies'  garment  industry  in  Cleveland,  Ohio.  Under 
this  scheme  each  manufacturer  guarantees  to  his  regular 
workers,  who  do  not  leave  voluntarily  and  are  not  dis- 
charged justifiably,  twenty  weeks  of  work  during  each 
half  year.  If  the  employer  fulfills  his  guaranty,  there 
is  no  penalty,  but  if  he  does  not  provide  the  guaranteed 
period  of  work  his  employees  become  entitled  to  two- 
thirds  of  their  respective  minimum  wages  during  the  un- 
employed part  of  the  twenty  weeks.  The  employer  builds 
up  an  unemployment  fund  by  depositing  with  the  impar- 
tial chairman  of  the  industry  7^2  per  cent  of  his  total 
direct  pay-roll  for  each  week.  At  the  end  of  each  six- 
month  period  that  portion  of  his  fund  which  has  not  been 
paid  out  to  his  workers  for  unemployed  time  is  returned 
to  him.  If  the  worker  is  able  to  secure  employment 
elsewhere  during  his  lay-off,  his  right  to  draw  unemploy- 
ment pay  from  his  regular  employer  is  not  affected.  This 
provision  is  justified  on  the  grounds  that  the  whole  scheme 
was  devised  as  a  penalty,  and  this  clause  constitutes  an 
incentive  to  the  employer  to  keep  his  workers  busy.  More- 
over, it  encourages  employees  to  seek  temporary  jobs 
elsewhere  rather  than  remain  idle.  An  efficiency  scheme 
of  production  is  operated  in  connection  with  this  plan. 

In  1921  a  bill  was  introduced  in  the  Wisconsin  legis- 
lature which  would  require  all  employers  to  pay  a  dollar 
a  day  for  a  period  of  thirteen  weeks  to  every  employee 
laid  off  through  no  fault  of  his  own,  but  solely  because 
of  the  lack  of  work.  As  Professor  Commons  suggests, 
the  institution  of  such  a  plan  would  mean  that  every 


Social    Insurance  639 

man  employed  would  add  a  liability  of  $80  to  $100  when 
he  is  laid  off.  Each  employer  would  be  required  to 
insure  his  liability.  Such  a  measure  would  tend  to 
regularize  production  and  stabilize  the  credit  basis  of 
industry,  since  unemployment  would  penalize  the  em- 
ployer rather  than  the  employee  as  under  the  present 
system,  and  banks  would  be  reluctant  to  advance  credit 
to  employers  who  could  not  show  ability  to  furnish  regular 
employment. 

Associations  for  the  Promotion  of  Labor  Laws  and 
Social  Insurance. — In  the  United  States,  as  in  other  coun- 
tries, the  progress  of  labor  legislation  can  be  attributed 
in  a  large  measure  to  the  efforts  of  nonofficial  associations. 
The  National  Consumers'  League,  organized  over  a  quar- 
ter of  a  century  ago,  has  been  an  effective  agency  in 
combating  the  sweatshop  evil  by  means  of  the  league's 
label.  The  National  Child  Labor  Committee,  with  branches 
in  many  industrial  centers,  was  organized  in  1904,  and 
through  investigation  and  education  promotes  the  pro- 
tection of  children  by  demanding  the  abolition  of  child 
labor.  The  American  Association  for  Labor  Legislation, 
which  is  a  section  of  the  International  Association  for 
Labor  Legislation,  was  founded  in  1906.  It  promotes 
uniformity  of  labor  legislation,  makes  investigations  of 
industrial  problems,  insists  on  the  enforcement  of  existing 
laws,  drafts  necessary  new  laws,  organizes  campaigns  to 
secure  the  enactment  of  desirable  laws,  and  defends  these 
measures  against  attempts  to  undermine  them.  It  has 
been  instrumental  in  securing  federal  and  state  work- 
men's compensation  acts,  a  weekly  rest  day,  industrial 
commissions,  public  employment  bureaus,  relief  and  pre- 
vention of  unemployment,  and  protection  of  wage-earners 
in  occupations  that  are  dangerous  to  health  and  life.  At 
present  it  is  carrying  on  an  active  campaign  for  a  system 
of  health  insurance.  The  association  is  founded  on  the 
principle  that  social  legislation  is  bettor  than  social 
revolution.  Other  agencies  carrying  on  investigation  and 
disseminating  information  concerning  the  problems  of 
labor  include  the  various  labor  organizations,  state  Indus- 


640  Social  Insurance 

trial  commissions  and  labor  bureaus,  and  the  United 
States  Department  of  Labor. 

The  International  Association  for  Labor  Legislation, 
founded  by  a  group  of  economists  and  reformers  at  Paris, 
in  1900,  has  been  the  most  prominent  organization  for 
international  action  in  protecting  wage-earners.  Other 
associations  of  this  kind  include  the  International  Federa- 
tion for  the  Observance  of  Sunday,  the  International 
Congress  on  Occupational  Diseases,  the  International 
Association  on  Unemployment,  the  Permanent  Interna- 
tional Committee  on  Social  Insurance,  and  the  Interna- 
tional Association  for  the  Protection  of  Native  Labor. 

Important  developments,  recommended  by  the  Inter- 
national Association  for  Labor  Legislation,  have  taken 
place  under  Part  XIII  of  the  Treaty  of  Versailles,  which 
concluded  the  World  War.  An  international  labor  office 
has  been  established  in  connection  with  the  League  of 
Nations,  with  headquarters  at  Geneva,  Switzerland.  The 
signatory  powers  concluded  that  a  lasting  peace  must  be 
founded  on  social  justice,  and  that  nations  which  refuse  to 
adopt  desirable  labor  standards  obstruct  the  progress  of 
other  nations.  The  International  Labor  Office  is  under 
the  control  of  a  board  of  governors  representing  the 
governments,  employers,  and  employees  of  affiliated  coun- 
tries. The  International  Labor  Review  is  the  medium 
through  which  the  investigations  of  the  office  are  published. 
International  labor  conferences  are  held  annually  by 
delegates  representing  employers,  employees,  and  the 
government  of  each  country  affiliated  with  the  League  of 
Nations.  About  thirty  countries  were  represented  at  the 
first  conference,  which  was  held  at  Washington,  District 
of  Columbia,  in  the  autumn  of  1919.  The  fundamental 
principles  of  the  Versailles  treaty  which  guide  the  con- 
ferences are:  The  physical,  moral,  and  intellectual  well- 
being  of  industrial  wage-earners  is  of  supreme  interna- 
tional importance;  the  labor  of  a  human  being  should 
not  be  regarded  as  a  commodity  or  article  of  commerce; 
the  right  of  association  for  all  lawful  purposes  must  be 
assured  employers  and  employees ;  there  must  be  payment 


Social  Insurance  641 

of  a  wage  adequate  to  maintain  a  reasonable  standard 
of  life ;  there  should  be  established  an  eight-hour  day  or 
a  forty-eight  hour  week ;  there  should  be  adopted  a  weekly 
rest  of  at  least  twenty-four  hours,  which  should  include 
Sunday  whenever  practicable;  child  labor  should  be 
abolished  and  such  limitations  imposed  on  the  labor  of 
young  persons  as  will  permit  the  continuation  of  their 
education  and  assure  proper  physical  development;  the 
principle  of  equal  pay  for  men  and  women  for  work  of 
equal  value  should  be  applied;  there  should  be  equitable 
treatment  of  all  workers  resident  in  a  country  with  regard 
to  the  application  of  all  these  standards ;  and  an  adequate 
and  efficient  system  of  factory  inspection  for  the  enforce- 
ment of  laws  and  regulations  should  be  instituted,  with 
provision  for  representation  of  women  on  these  agencies. 
Conclusions. — Social  insurance  is  a  recognition  of  those 
larger  social  responsibilities,  the  assumption  of  which 
will  assure  peaceful,  constructive  progress.  As  yet,  pro- 
tection is  very  meager.  With  proper  safeguards  against 
abuses,  the  benefits  of  health,  accident,  and  unemploy- 
ment insurance,  and  old  age  pensions  should  be  made 
more  generous.  The  international  regulation  of  industrial 
conditions  is  necessary  and  expedient,  since  it  protects 
the  employers  of  progressive  countries  against  competi- 
tion with  those  of  backward  countries. 


SELECTED  REFERENCES 

AMERICAN  LABOR  LEGISLATION  REVIEW,  Vol.  IX,  Sept.,  1921. 

COMMONS,  J.  R.  (editor),  Trade  Unionism  and  Labor  Problems, 
revised  edition,  1921,  Chaps.  II-VI. 

COMMONS,  J.  R.,  AND  ANDREWS,  J.  B.,  Principles  of  Labor  Legis- 
lation, revised  edition,  1920,  Chaps.  VIII  and  IX. 

FISHER,  W.  C.,  American  Experience  with  Workmen's  Compensa- 
tion, Amer.  Econ.  Rev.,  10:18-47,  March,  1920. 

MAONUSSON,  LEI  FUR,  Control  of  Labor  Conditions  by  Inter- 
national Action,  Monthly  Labor  Review,  8:1-11,  April,  1915). 

PENNSYLVANIA  HEALTH  INSURANCE  COMMISSION,  Report  on  the 
British  Health  Insurance  Act,  American  Labor  Legislation 
Review,  11 :233-279,  Sept.,  1921. 


648  Social  Insurance 

RUBINOW,  I.  M.,  Social  Insurance,  1913. 

SCHLOSS,  D.  F.,  Insurance  Against  Unemployment,  1909. 

SEAGER,  H.  R.,  Social  Insurance,  1910. 

SEAGER,  H.  R.,  Principles  of  Economics,  revised  edition,  1917, 

Chap.  XXXII. 

UNITED  STATES  BUREAU  OF  LABOR  STATISTICS,  Bulletin  206,  1916. 
UNITED  STATES  BUREAU  OP  LABOR  STATISTICS,  Monthly  Labor 

Review,  11 :1-11,  Sept.,  1920. 
W  ATKINS,  G.  S.,  Labor  Problems  and  Labor  Administration  in 

the  United  States  During  the  World  War,  1919,  pp.  178-205. 


CHAPTER  XXV11 

THE  BASIS  OF  PROGRESS 

The  Need  of  a  New  Motive  in  Industry. — During  the 
World  War  and  the  period  of  reconstruction  subsequent 
thereto,  humanity  has  been  burdened  with  problems  of 
economic,  political,  and  social  relationships  vastly  more 
complex  than  have  appeared  in  any  preceding  generation. 
The  social  fabric  of  the  world  has  been  rent,  and  nations 
have  been  forced  to  attempt  the  discovery  of  a  rational 
basis  for  social  reorganization  and  human  amelioration. 
There  has  been  a  deep  search  after  truth,  a  scrutiny  of 
accepted  theories  and  modes  of  action,  a  reexaminatlon 
of  the  basis  of  human  relationships,  and  the  formulation 
of  far-reaching  demands  upon  political  and  industrial 
systems.  There  is  a  general  questioning  of  things  as  they 
are,  and  a  pronounced  insistence  upon  the  realization  of 
things  as  they  should  be. 

In  every  land  governmental  agencies,  labor  organiza- 
tions, industrial  and  commercial  associations,  scientific 
societies,  and  religious  bodies  have  advanced  numerous 
programs  for  the  readjustment  and  improvement  of 
industrial  relations.  Partisan  convictions  and  prejudices 
have  characterized  many  of  the  schemes  presented,  but 
they  accord  in  this  particular  conclusion:  Fundamental 
changes  must  be  made  in  our  economic  and  political  sys- 
tems if  they  are  to  function  constructively  and  unselfishly, 
in  the  interests  of  all  those  for  whom  they  are  assumed 
to  exist,  and  if  the  universal  undercurrents  of  industrial 
and  social  unrest  are  not  to  take  civilization  adrift  on 
uncharted  seas  of  experimentation.  There  is  concurrence 
also  in  the  thought  that  industry  and  commerce  must  find 
nobler  motives  than  those  that  have  prevailed  in  the  past. 

643 


644  The  Basis  of  Progress 

The  soundness  and  sincerity  of  particular  proposals  for 
the  readjustment  of  industrial  relations  have  not  gone 
unquestioned,  but  there  is  an  unparalleled  fineness  in  the 
note  common  to  them  all,  that  a  new  basis  must  be  found 
if  civilization  is  to  be  salvaged,  and  that  new  foundations 
for  thought  and  action  in  industry  must  be  discovered 
if  social  progress  is  to  be  assured.  The  analysis  and 
survey  of  labor  problems  which  has  been  attempted  in 
this  volume  indicate  the  serious  maladjustments  that  still 
obtain  in  industry,  and  the  description  of  proposed 
remedies  suggests  that  sincere  efforts  are  being  made  to 
eliminate  the  many  evils  and  to  improve  the  general  eco- 
nomic status  of  the  wage-earning  classes. 

The  basic  instruments  that  form  the  foundation  of 
American  political  democracy  rest  upon  the  fundamental 
assumption  that  all  men  are  entitled  to  equality  of  oppor- 
tunity, and  possess  certain  inalienable  rights  to  life, 
liberty,  and  the  pursuit  of  happiness.  These  truths  have 
been  held  self-evident,  yet  in  the  increasing  complexity 
of  our  industrial  life  their  application  has  been  extremely 
limited.  These  traditional  ideals  have  not  been  achieved 
in  modern  economic  relations.  More  general  acceptation 
is  being  given  to  the  thought  that  service,  rather  than 
selfish  gain,  must  actuate  the  economic  activities  of  our 
people.  It  is  now  agreed  that  the  purpose  of  industry 
is  quite  as  much  to  advance  the  social,  as  the  material 
well-being,  and  that  in  the  achievement  of  this  aim  the 
interests  of  society  must  be  safeguarded. 

The  need  of  a  new  motivation  in  industry  was  expressed 
by  the  British  Labor  Party  in  its  reconstruction  pro- 
gram, in  which  it  urged  the  destruction  of  the  individual- 
istic system  with  the  "monstrous  inequality  of  circum- 
stances" and  the  "degradation  and  brutalization,  both 
moral  and  spiritual,"  which  it  produces,  and  demanded 
that  there  shall  be  erected  a  new  social  order  "based  not 
on  fighting  but  on  fraternity;  not  on  the  competitive 
struggle  for  the  means  of  bare  life,  but  on  a  deliberately 
planned  cooperation  in  production  and  distribution,  for 
the  benefit  of  all  who  participate  by  hand  or  by  brain; 


The  Basis  of  Progress  645 

not  on  the  utmost  inequality  of  riches,  but  on  a  systematic 
approach  towards  a  healthy  equality  of  material  circum- 
stances for  every  person  born  into  the  world ;  not  on  an 
enforced  dominion  over  subject  nations,  but  in  industry 
as  well  as  in  government,  on  that  equal  freedom,  that 
general  consciousness  of  consent,  and  that  widest  possible 
participation  in  power,  both  economic  and  political,  which 
is  characteristic  of  democracy."  American  labor  also 
has  declared  that  new  conceptions  of  liberty,  justice,  and 
opportunity  must  be  applied  if  industrial  peace  and  social 
progress  are  to  be  promoted. 

Each  agency  of  social  reform  is  seeking  the  achieve- 
ment of  the  same  ideal ;  namely,  the  direction  of  economic 
activities  along  lines  and  in  the  manner  that  will  conduce 
to  the  fullest  expression  of  individuality  in  industrial  and 
social  life.  The  greatest  possible  degree  of  happiness  is 
sought  for  the  largest  number  of  persons.  This  neces- 
sitates a  new  motivation  in  industry,  business,  and  com- 
merce. Selfish  gain  and  the  rapid  accumulation  of  wealth, 
which  have  been  the  dominant  motives  of  economic  ac- 
tivity, must  be  replaced  by  recognition  of  general  human 
interests  and  the  motive  of  service  to  society.  The  free 
play  of  economic  forces  has  failed  to  assure  social  justice 
and  has  tended  to  build  up  an  industrial  system  in  which 
the  financially  and  politically  powerful  have  been  able 
to  exploit  the  weaker  members  of  the  group.  There  is  an 
excellent  unselfishness  in  recent  demands  for  the  rational- 
izing of  industry,  the  humanizing  of  industry,  and  the 
Christianizing  of  industry.  The  terms  vary,  but  the  ob- 
jective is  the  same.  In  the  past  men  have  been  sub- 
ordinated to  machines  and  fitted  to  jobs  with  little  regard 
for  the  physiological  and  psychological  factors.  If  indus- 
try is  to  function  for  service  to  the  many  rather  than  for 
the  aggrandizement  of  a  few,  it  must  be  adjusted  to  the 
physical,  mental,  and  social  needs  of  those  who,  by  hand 
and  brain,  make  industry  possible.  Production  and  indus- 
trial peace  cannot  be  secured  unless  the  conditions  and 
administration  of  industry  are  such  that  the  workers  will 
project  themselves  readily  into  their  tasks.  Incentives 


646  The  Basis  of  Progress 

to  production  are  best  secured  by  a  sympathetic  recogni- 
tion of  the.  human  factors  that  enter  therein.  This  under- 
standing will  be  possible  only  when  service  shall  super- 
sede greed  as  the  impetus  of  economic  effort. 

General  Principles  of  Procedure. — While  the  realization 
of  desirable  human  experiences  in  industry  and  social 
life  is  conceded  to  be  the  end  of  a  rational  civilization, 
there  exists  no  royal  road  to  its  achievement.  There  is 
no  panacea  for  the  numerous  social  and  industrial  ills. 
Underlying  all  methods  of  industrial  progress,  however, 
are  the  following  principles:  (1)  recognition  of  the  com- 
mon interests  of  employers  and  employees;  (2)  protection 
of  the  well-being  of  wage-earners,  managers,  investors, 
and  consumers  in  the  production  and  distribution  of 
wealth;  (3)  acceptance  of  the  principle  that  every  in- 
dividual should  be  assured  an  opportunity  to  earn  a 
living ;  receive  a  living  wage ;  and  enjoy  reasonable  hours 
of  work,  proper  conditions  of  employment,  decent  hous- 
ing, and  freedom  from  the  fear  of  recurrent  unemploy- 
ment; (4)  recognition  of  the  necessity  of  preventing 
physical  and  mental  fatigue  of  the  workers,  and  of  giving 
full  expression  to  the  basic  instincts  of  workmanship, 
self-respect,  play,  and  love  of  family;  (5)  encouragement 
of  initiative,  enterprise,  and  efficiency,  and  the  discourage- 
ment of  indolence,  indifference,  waste,  and  limitation  of 
output;  (6)  adequate  representation  for  all  parties  in- 
terested in  industry,  and  the  provision  of  effeclive  ma- 
chinery for  the  adjustment  of  industrial  grievances;  (7) 
acceptance  of  the  principles  that  every  right  and  privilege 
implies  a  corresponding  duty  and  obligation,  that  the 
rights  of  others  must  be  respected,  that  self-control  must 
be  exercised,  that  labor  is  the  basis  of  life,  and  that 
wealth  is  a  social  trust;  and  (8)  concurrence  in  the 
thought  that  the  greatest  social  service  is  rendered  when 
industry  is  managed  and  operated  so  as  to  afford  to  every 
individual  the  fullest  opportunity  for  self-development 
and  self-expression,  and  to  give  to  society  the  best  quality 
and  the  greatest  quantity  of  goods  and  services  at  rea- 
sonable cost. 


The  Basis  of  Progress  647 

Social  Expediency  and  Control. — What  is  the  proper 
basis  for  judgment  concerning  those  serious  problems  of 
human  relationship  in  industry  which  are  commanding 
the  attention  of  the  civilized  world?  What  is  the  funda- 
mental criterion  of  right  and  wrong  in  economic  practices? 
To  the  man  of  property  and  wealth,  that  conduct  is  right 
which  maintains  present  conditions  and  relations,  and 
that  conduct  is  wrong  which  threatens  to  destroy  vested 
rights  and  privileges.  To  the  propertyless  wage-earner, 
on  the  other  hand,  that  conduct  is  proper  which  curtails 
rights  and  privileges  in  the  interests  of  industrial  justice, 
and  that  conduct  is  wrong  which  enables  a  few  to  control 
the  economic  life  of  the  many.  Employers  and  employees 
are  often  inconsistent  in  the  interpretation  of  those  con- 
stitutional rights  which  they  hold  to  be  self-evident.  Em- 
ployers welcome  government  action  when  it  results  in 
the  protection  of  property,  industry,  business,  and  com- 
merce from  the  forces  that  would  limit  or  abolish  basic 
rights  and  privileges,  but  they  are  opposed  to  govern- 
ment interference  when  it  restrains  absolute  freedom  of 
enterprise.  Employees  welcome  government  regulation 
of  industry  when  it  substitutes  workmen's  compensation 
laws  for  the  common  law  principles  of  employers'  liability, 
prescribes  minimum  wages,  abolishes  child  labor,  and 
makes  factories  safe  and  sanitary,  but  they  are  opposed 
to  government  action  when  it  limits  the  right  to  strike, 
although  such  restriction  may  be  necessary  in  the  interest 
of  public  safety  and  welfare.  It  is  not  difficult  for  the 
manufacturer  to  explain  the  legitimacy  of  protective 
tariff,  even  when  he  knows  it  means  higher  prices  to 
domestic  consumers,  but  he  cannot  be  convinced  that  it 
is  within  the  proper  functions  of  government  to  limit 
the  influx  of  cheap  labor  by  immigration  laws.  Employers 
and  organized  workers  accept  arbitration  when  they  have 
everything  to  gain  and  nothing  to  lose,  but  they  refuse 
it  when  the  advantages  are  not  so  manifestly  in  their 
favor. 

Natural  rights  can  exist  only  under  jungle  conditions 
where  the  race  is  to  the  swift  and  the  battle  to  the  strong, 


648  The  Basis  of  Progress 

and  the  mightiest  and  fittest  survive.  Social  life  is  a 
natural  thing  only  in  the  sense  that  it  has  evolved  in 
response  to  the  gregarious  instinct  in  man,  that  is,  because 
man  is  essentially  a  social  being.  It  is  artificial  to  the 
degree  that  men  have  consciously  imp'aged  restrictions 
on  absolute  freedom  of  expression  of  those  fundamental 
instincts  that  govern  jungle  life.  Fundamentally,  all 
rights  and  privileges  are  socially  derived,  and  each  right 
implies  a  corresponding  duty  to  society.  What  society 
has  bestowed  it  has  power  to  take  away.  Social  ex- 
pediency, then,  is  the  fundamental  criterion  of  right  and 
wrong  in  human  relationships,  whether  in  political,  social, 
or  industrial  life.  That  conduct  which  conduces  to  the 
best  interests  of  society  will  ultimately  be  sanctioned  and 
justified,  and  that  which  hinders  the  progress  of  the  social 
group  and  threatens  its  existence  will  be  judged  wrong 
and  unmoral.  This  is  equivalent  to  saying  that  society 
can  make  anything  right,  and  that  it  will  accept  per- 
manently only  those  institutions  and  modes  of  conduct 
that  lead  to  social  progress. 

No  vague  theorizing  about  abstract  natural  rights  can 
be  a  permanent  basis  for  conduct  in  industry.  The  man- 
agement of  industry  and  the  control  of  economic  life  in 
general  must  "be  judged  in  the  light  of  their  effects  upon 
the  welfare  and  progress  of  the  nation.  A  social  and 
industrial  life  approximating  the  ideal  can  come  only 
through  conscious  control  of  individuals  and  of  material 
conditions.  Relations  must  be  peaceful  and  conduct  moral 
if  social  progress  is  to  be  realized.  This  means  that  in- 
dustry, business,  and  commerce  must  be  subordinated  to 
general  human  interests  and  welfare,  not  human  interests 
and  welfare  to  the  selfish  purposes  of  economic  groups. 
Not  domination  by  a  single  economic  class,  but  coordina- 
tion of  interests  and  general  control  for  mutual  benefit 
is  the  basis  of  constructive  evolution.  Social  control  will 
be  acceptable  only  when  it  functions  under  the  direction 
of  an  enlightened,  unbiased,  and  rational  public  opinion, 
and  regulates  industry  in  the  interests  of  the  general 
welfare. 


The  Basis  of  Progress  649 


SELECTED  REFERENCES 

BASSET,  W.  R.,  When  the  Workmen  Help  You  Manage,  1919. 
BRITISH   LABOR   PARTY,   Reconstruction  Program,   L.   D.    Edie, 

Current  Social  and  Industrial  Forces,  1920,  pp.  167-187. 
CLEVELAND,  F.  A.  (editor),  Democracy  in  Reconstruction,  1919, 

Chap.  XV. 
COLE,  G.  D.  H.,  Labor  in  the  Commonwealth,  1919,  Chaps.  I 

and  X. 
FARNHAM,  D.  T.,  America  v.  Europe  in  Industry:  A  Comparison 

of  Industrial  Policies  and  Methods  of  Management,  1921. 
FEDERAL  COUNCIL  OP  THE  CHURCHES  OF  CHRIST  IN  AMERICA, 

Reconstruction   Program,   Monthly   Labor  Review,   9:66-75, 

Aug.,  1919. 
GADSBY,  MARGARET,  The  Engineers'  Report  on  Industrial  Waste, 

Monthly  Labor  Review,  13:7-17,  Sept.,  1921. 
HAYES,  E.   C.,  Introduction  to  the  Study  of  Sociology,  1915, 

Chap.  XXI. 

HOBSON,  J.  A.,  The  Industrial  System,  1910,  Chap.  XIX. 
HOXIE,  R.  F.,  Trade  Unionism  in  the  United  States,  1917,  Chap. 

XIV. 

KING,  W.  L.  M.,    Industry  and  Humanity,  1918,  Chap.  XII. 
NATIONAL    CATHOLIC   WAR    COUNCIL,   Reconstruction   Program, 

Monthly  Labor  Review,  8 :44-52,  June,  1919. 
PARKER,  C.  H.,  Motives  in  Economic  Life,  Amer.  Econ.  Rev. 

Sup.,  8:212-231,  March,  1918. 
POUND,  ARTHUR,  The  Iron  Man,  Atlantic  Monthly,  128:611-618, 

787-794,  129:179-189,  345-350,  1921,  1922. 
Ross,  E.  A.,  The  Principles  of  Sociology,  1920,  Chaps.  XXXIV 

and  XXXV. 

Ross,  E.  A.,  Social  Control,  1904. 
ROWNTREE,  B.  S.,  The  Human  Side  of  Business  Administration, 

Atlantic  Monthly,  129 :466-473,  1922. 
UNITED  STATES  COMMISSION  ON  INDUSTRIAL  RELATIONS,  Final 

Report,  1916,  pp.  307-404. 
WATKINS,  G.  S.,  Labor  Problems  and  Labor  Administration  in 

the  United  States  During  the  World  War,  1919,  Chap.  VII. 
WERA,  EUGENE,  Human  Engineering,  1921. 


INDEX 


Abbott.  E.,  writings  on  labor 
problems,  cited,  125,  147,  148, 
178 

Accidents,  to  child  laborers,  136- 
137;  extent  of  industrial,  190- 
191;  occupational  distribution 
of,  191-193;  causes  of,  193-195; 
social  and  economic  cost  of, 
195-197;  industrial  fatigue  as  a 
factor  in,  205-206;  wage-earn- 
ers and  the  financial  burden  of, 
206-207;  among  immigrants 
unused  to  machinery,  277-278; 
safety-first  movement  for  pre- 
vention of,  485-488 

Adams  and  Sumner.  Labor  Prob- 
lems, quoted  ana  cited,  141, 
303,  500.  545,  546 

A  damson  Law,  passage  of.  421 

Adjustment  of  industrial  disputes, 
attempts  at,  415-444;  national 
system  of,  proposed,  444-446 

Agriculture,  perioa  of,  in  economic 
evolution,  10;  the  basic  indus- 
try in  American  colonies,  25; 
women  engaged  in,  151 ;  statis- 
tics of  accidents  in  pursuits 
along  lines  of,  192 

Alexander,  M.  W.f  article  by, 
cited,  260 

American  Antiboycott  Associa- 
tion (League  for  Industrial 
Righte),  395,  401 

American  Association  for  Labor 
Legislation,  639 

American  Federation  of  Labor, 
successor  of  Knights  of  Labor, 
850;  history  of,  851-352;  in 
structure  a  federation  of  umonn, 
852-853;  organization  of,  353- 
355;  attitude  toward  shop 


committee  systems,  470;  oppo- 
sition of  revolutionary  com- 
munism to,  588 

American  plan,  or  open  shop,' 376- 
377 

American  Museum  of  Safety, 
organization  of,  486 

American  Newspaper  Publishers' 
Association,  409 

Analysis  of  jobs,  for  proper  selec- 
tion of  employees,  479-480 

Anarchism,  relation  between  con- 
ditions of  labor  and,  66-67;  the 
antithesis  of  socialism,  573 

Apprentices,  system  of,  in  English 
factory  system,  122-124;  ad- 
mission of,  to  trade  unions,  369; 
limitation  of  number,  369-370; 
industrial  education  and  train- 
ing of,  under  modern  plans,  519- 
535 

Apprenticeships  in  machine  indus- 
tries, 533 

Arbitration,  voluntary,  417;  com- 
pulsory, 418;  primary  and  sec- 
ondary, 418;  federal  ooards  of, 
418-425;  state  boards  of,  425- 
430;  advantages  and  disad- 
vantages of,  436-438 

Arsenic  poisoning,  an  occupa- 
tional disease,  198 

Associated  Employers  of  Indian- 
apolis, 408-409 

Associations,  employers',  389-414; 
mutual  benefit,  among  em- 
ployees, 490-492;  for  labor 
legislation  and  social  insurance, 
639-641 

Attack  strikes  and  defense  strikes, 
300 

Australasia,    efforts   for   govern- 


651 


652 


Index 


mental  adjustment  of  industria 
disputes  in,  432-434;  minimum 
wage  legislation  in,  603-604 
old  age  pensions  in,  633 

Ballard    and    Ballard    Company 
profit-sharing  plan  of,  511-512 
Banking,  experiments  in  coopera- 
tive, 560-562 
Banks,   regulation   of  credit  by 

247-248 

Bargaining  theory  of  wages,  79-82 

Barnett,  G.  E.,  article  by,  cited, 

358;     on    deficiency    in    trade 

training,  519-520 

Bauer,  Stephan,  cited,  112 

Bemis,  E.  W.,  on  cooperation  in 

United  States,  545 
Benefits    for    injured    workmen, 

623-628 
Benefit    schemes,     trade    union, 

366-369 
Betterment  plans  for  employees, 

490-493 

Black  Death,  effects  of,  12 
Blacklist,  defined,  302-303;  legal 

status  of,  323-324 
Bogart,  E.  L.,  Economic  History 

of  United  States,  cited,  29 
Bolshevism,  defined,  572 
Bonus.     See  Cash  bonus 
Boycott,  defined,  301;    kinds  of, 
301-302;    legal  status  of,  316- 
319 
Brissenden,  Paul,  History  of  I.  W. 

W.,  cited,  357 
Budget  levels,  standards  of  living 

and,  43-44;  studies  of,  45-16 
Building  Construction  Employers' 
Association  of  Chicago,  407-408 
Building  trades,  employers'  asso- 
ciations in   the,   391-392,   394; 
agreement  concluded  in,  443- 
444 

Building  Trades  Employers'  Asso- 
ciation of  New  York  City,  409 
Burritt,  A.  W.,  profit-sharing  by, 
513-514;      quoted    on    profit- 
sharing,  517 

Business  unionism,  characteristics 
of,  335 

Canada,     attempts     at     govern- 


mental adjustment  of  industrial 
disputes  in,  434-436 
Capital,   one  of  four  parties   to 

industry,  4-5 

Capitalism,  indictment  of,  by 
socialism,  575-576;  abolition 
of,  an  aim  of  socialism,  580; 
conclusions  concerning  social- 
ism and,  590 

Cash  bonus,  method  of  profit- 
sharing,  500,  501;  determina- 
tion of,  502-503 

Chapin,  R.  C.,  work  by,  on  stand- 
ard of  living,  cited,  43 
Check-off  system,  the,  373-374 
Cheyney,    E.    P.,    Industrial  and 
Social     History     of     England 
quoted,  14,  19,  123 
Child  Labor  Law,  598-600 
Children,  employment  of,  in  in- 
dustry,   120-122;    problem  of, 
in  England,  122-124;   problem 
in     United     States,     124-126; 
recent  growth  in  labor  of,  126- 
128;    occupations  of,   129-131; 
wages  of,  131-132;    conditions 
of  employment,    132-133;    in- 
stability  of,    as    workers,    and 
resulting  expensiveness  ol  their 
labor,  133-134;   unemployment 
among,  134-135;  accidents  and 
sickness  among  workers.   136- 
137;    economic  effects  of  labor 
by,   137-138;    reasons  for  em- 
ployment of,    138-140;    moral 
aspects  of  problem  of,  141-143; 
minimum  standards  of  employ- 
ment of,  143-144;    labor  legis- 
lation  for  protection  of,    595- 
601 

Chinese,  immigration  of,  292-296 
Chinese  Exclusion  Act,  295 
Christian  socialism,  568-569 
"ities,  growth  of,  in  United  States, 
^  38;  foreign  quarters  in,  285 
/lark,  L.  D.,  article  by,  quoted, 
608 

Jlark,  W.  I.,  cited,  485 
'layton    Act,    passage    of,    317: 
provisions  of,  317-319 
Cleveland,  President,  steps  taken 
by,    toward   governmental   ad- 
justment of  industrial  disputes 
418-420 


Index 


653 


Cleveland  and  Schafer,  Democracy 
in  Reconstruction,  quoted,  38- 
39 

Cleveland  plan  of  unemployment 
insurance,  638 

Closed  shop,  open  shop  versus, 
375^79 

Clothing  industry,  sweating  sys- 
tem in,  178-183;  trade  agree- 
ments concluded  in,  439-442 

Collective  bargaining,  the  purpose 
of  labor  organizations,  330 

Collectivism,  defined,  572 

Colleges,  labor,  382-384 

Colonies,  American,  industry  and 
labor  in,  25-27 

Colorado  Fuel  and  Iron  Company, 
employee  representation  plan 
of,  466-467 

Colorado  Industrial  Commission 
Act  of  1915,  427 

Committees,  shop,  449-473 

Commodity  distribution,  wasteful 
methods  of,  and  unemployment, 
228 

Commons,  John  R.,  Trade  Union- 
ism and  Labor  Problems,  quoted, 
2;  on  unemployment,  228-229 

Commons  ana  Andrews,  quoted, 
603-604 

Communism,  defined,  572;  pro- 
gram of,  in  United  States,  587- 
588;  opponent  of  A.  F.  of  L., 
588 

Compulsory  arbitration,  pro- 
cedure called,  418 

Compulsory  investigation,  417- 
418 

Conciliation,  defined,  416 

Consumers'  cooperation,  538-551 

Continuous  shift  system.  105-106 

Cooke-Taylor,  R.  W.,  The  Factory 
System,  cited,  13 

Cooperation,  importance  of,  in 
relation  to  labor  problems,  537; 
nature  and  forms  of,  537-538; 
consumers',  538-551:  pro- 
ducers', 551-557;  distributors', 
557-558;  criticism  of,  and  con- 
clusions concerning,  562-564 

Cooperative  buying,  plans  of,  492- 
493 

Copartnership.  Sec  Labor  co- 
par  tnerslup 


Corporation  schools,  examples  of, 

532 
Cost  of  living,  changing  aspects 

in,  48-50 
Cost    of    subsistence    theory    of 

wages,  71-73 

Councils,  industrial,  449-473 
Court    of    Industrial    Relations, 

Kansas,  427-430 
Credit,   unemployment  traceable 

to  overexpansion  in,  228-229; 

more    conservative    regulation 

of,   as   remedy   for   unemploy- 

ment, 247-248 
Creditor,  protection  of  laborer  as, 

615-616 
Credit  societies,  cooperative,  558- 

560 

Crime  and  unemployment,  212 
Cross,  Ira  B.,  cited  on  cooperation 

in  United  States,  547 
Cycles,  business,  and  relation  to 

unemployment,  225-226 

Danbury  Hatters'  case,  317,  401 
David  Company,  employee  repre- 

sentation plan  at,  465-466 
Davidson,  J.,  Bargain  Theory  of 

Wages,  cited,  79 
Debtor,  protection  of  laborer  as, 

614-«15 
Deferred  sharing,  method  of  profit- 

sharing,  500,  501 
Demand  and  supply,  in  relation 

to  unemployment,  213-215 
Democracy,   political  and  indus- 

trial, 449,  473 
Dennison    Manufacturing    Com- 

pany, regularization  of  industry 

by,  236-238 

Discharges  of  employees,  481-483 
Discovery  and  invention,  as  con- 

ditions in  economic  evolution,  9 
Diseases,  in  homes  of  child  labor- 

ers, 133;  among  child  workers, 

136-137;      dangers     of,     from 

sweating    system,    177;     occu- 

pational,    197-200;      responsi- 

bility for  occupational,  200-201 
Disputes,    industrial,    and    their 

adjustment,  415-447 
Distribution  of  product  of  labor, 


Distributors'  cooperation,  557-558 


654 


Index 


Division  of  labor,  beginnings  of, 
in  England,  17 

Earnings,  average,  of  labor,  59- 
63;  wage  scales  as  an  index  of. 
65;  loss  of,  from  occupational 
diseases,  201-202.  See  also 
Wages 

Economic  evolution,  systems  of 
labor  in,  10-14 

Education,  loss  of  opportunity 
for,  due  to  employment  of 
children,  140-141;  industrial, 
as  remedy  for  unemployment, 
234-235;  active  interest  of 
labor  organizations  in,  382-384; 
shop  committees  and  works 
councils  as  agencies  for,  451; 
need  for  technical,  519-521; 
vocational,  in  United  States, 
521-526;  fundamental  princi- 
ples and  methods  in  industrial 
training,  529-530;  advantages 
of  vocational,  533-534;  sociali- 
zation of,  589 

Efficiency  of  women  workers,  163- 
166 

Eight-hour  day,  movement  for, 
114-118;  for  women  workers, 
168.  See  Hours  of  labor 

Ely,  R.  T.,  Outlines  of  Economics, 
quoted,  11 

Employee  representation  plans, 
success  of,  470-471 

Employees,  functions  of  personnel 
department  relative  to,  476- 
496;  profit-sharing  plans  for, 
498-517 

Employers'  associations,  reasons 
for,  and  development  of,  389- 
393;  types  of,  393-396;  gov- 
ernment, methods,  and  policies 
of,  396-399;  examples  of  suc- 
cessful, 400-409;  achievements 
of,  410;  attitude  of  organized 
labor  toward,  410^413;  eco- 
nomic and  social  justification 
for.  413 

Employers'  liability,  621-623 

Employment  agencies,  regulation 
of  private,  239-242 

Employment  exchanges,  public, 
242-247 

England,  emergence  of  labor  prob- 


lems in,  9-23;  problem  of  hours 
of  labor  in,  98-101 ;  problem  of 
child  labor  in,  122-124;  de- 
velopment in,  of  law  in  relation 
to  industrial  disputes,  312-314; 
labor  legislation  in,  592-594. 
See  also  Great  Britain 

"Equal  pay  for  equal  work" 
movement,  161-163,  185 

Erdman  Act  of  1898,  419,  420 

Ethics,  study  of  labor  problems  as 
related  to,  5-6 

Europe,  public  employment  bu- 
reaus in,  245-247 

Evolution,  view  of  social  relations 
as  product  of,  3-4 

Exchange  theory  of  wages,  77-79 

Fabianism,  account  of,  570-571 

Factory  system,  English,  15;  de- 
velopment of,  in  United  States, 
3(^34 

Family  budgets,  43-46 

Farms,  work  of  children  on,  130- 
131;  women  on,  151 

Fatigue,  industrial,  203-205;  as 
factor  in  accidents,  205-206 

Federal  government,  efforts  of,  to 
adjust  industrial  disputes,  418- 
425 

Federal  Reserve  System,  as  a 
regulator  of  credit,  248 

Fire  hazards,  protection  of  em- 
ployees against,  612 

Fisher,  Boyd,  article  by,  cited,  261 

Fisher,  Irving,  National  Vitality, 
etc.,  cited,  201,  202,  205 

Fisher,  W.  C.,  cited,  196 

Ford  Motor  Company,  labor 
turnover  of,  251;  cost  to,  of 
rate  of  turnover,  260 

France,  industrial  councils  in,  472; 
profit-sharing  schemes  in,  500, 
503-504;  examples  of  successful 
profit-sharing  and  labor  co- 
partnership in,  506-509;  pro- 
ducers' cooperation  in,  551- 
552;  socialism  in,  584 

Friendly  benefit  funds,  union, 
366-369 

Friendly  or  uplift  unionism,  char- 
acteristics of,  335 

Geographic  environment,  a  condi- 


Index 


655 


tion  in  determining  economic 
evolution,  9;  effect  of,  on  In- 
dustry in  American  colonies, 
25-26 

George,  Henry,  wage  theory  of, 
84-85 

Germany,  industrials  councils  in, 
472;  cofiperative  credit  socie- 
ties in,  658-559;  state  social- 
ism in,  670;  socialist  vote  in. 
584:  legal  provision  for  injured 
workmen  in,  623;  health  insur- 
ance in,  628-629 

Ghent  system  of  unemployment 
insurance,  635-636 

Gide,  Charles,  Political  Economy, 
quoted,  58.  63,  69,  70;  on  labor 
copartnership,  505-506;  ap- 
pointed to  chair  of  cooperation 
at  College  de  France,  552 

GHbreth,  F.  B.  and  L.  M.,  Fatigue 
Study,  quoted,  203 

Gilds,  medieval,  11-12,  838 

Godin  Familistere,  labor  copart- 
nership scheme  of,  607-509 

Goldmark,  J.,  Fatigue  and  Effi- 
ciency, cited  and  quoted,  109, 
112,  169 

Gompers,  Samuel,  quoted  on 
American  Federation  of  Labor, 
352-363;  opposition  of,  to  one 
big  union  idea,  384;  decision 
secured  against,  by  League  for 
Industrial  Rights,  402;  quoted 
on  employers  associations,  411; 
quoted  on  Kansas  Court  of 
Industrial  Relations,  437;  on 
effects  of  compulsory  arbitra- 
tion, 438 

Gould,  G.  M.,  on  cost  of  occupa- 
tional diseases,  201-202 

Government,  activities  of  federal 
and  state,  toward  adjustment 
of  industrial  disputes,  418-430 

Great  Britain,  industrial  acci- 
dents in,  206;  unemployment 
problem  in,  218;  labor  ex- 
changes in,  246-246;  govern- 
mental adjustment  of  industrial 
disputes  in,  480-432;  industrial 
councils  in,  471,  472;  profit- 
sharing  schemes  in,  600,  601- 
602,604;  examplos  of  successful 
profit-sharing  and  labor  co- 


partnership schemes  in,  509- 
511;  cooperative  movement  in, 
641-544;  cooperative  produc- 
tion in,  652-554;  cooperative 
credit  in,  569-560;  cooperative 
banking  experiments  in,  660- 
561;  legal  protection  for  in- 
jured workmen  in,  623;  health 
insurance  in,  628-629;  unem- 
ployment insurance  scheme  in, 
636-638.  See  also  England 

Grievances  of  employees,  atten- 
tion to,  481-183 

Guild  socialism,  571-572 

Gunton,  George,  wage  theory  of, 
85-87 

Habits,   ill   effect  on,   of  unem- 
ployment, 212 
Hart,  H.,  cited  on  unemployment, 

215.  224 
Health  and  decency  standard  of 

living,  44 
Health  insurance,  systems  of,  628- 

631 
Health  measures  for  employees, 

483-485 
Heating,  legislative  provisions  for 

proper,  613 

Heredity,  part  taken  by,  in  eco- 
nomic evolution,  9 
Hiring  and  firing,   problems  of, 

478-479,  481-483 
History,  study  of  labor  problems 

as  related  to,  5-6 
Hobson,  John  A.,  wage  theory  of, 

88-90 
Hoffman,  Frederick  L.,  statistics 

by,  190-191 ;  quoted  and  cited, 

196-197,  199,  202 
Hollander  and  Bamett,  Studies  in 

American  Trade   Unionism,   1, 

390 

Homework,  industrial,  176-184 
Hookstadt,  C.,  article  by,  cited, 

on 

Hoover,  Herbert,  quoted  on  un- 
employment, 248 

Hours  of  labor,  problem  of,  97; 
development  of  problem  in 
England,  98-101;  problem  in 
United  States,  101-104;  ad- 
vantages and  diftadvuntages  of 
shorter,  104-106;  the  twelve* 


656 


Index 


hour  day  and  continuous  shift 
system,  105;  comparative  pro- 
ductivity of  night  work  and 
day,  106-108;  problem  of  over- 
time, 108-110;  Sunday  work, 
110-111;  relation  of,  to  output, 
111-113;  testimony  of  indus- 
trial commissions  regarding, 
113-114;  movement  for  eight- 
hour  day,  114-118;  for  women, 
167-171,185;  legislation  affect- 
ing, 597,  601-602,  610-611 

Howat  and  Dorchy,  case  of,  429 

Hoxie,  R.  F.,  Trade  Unionism  in 
United  States,  quoted  and  cited, 
3,  303,  335,  337 

Human  waste  in  industry,  189- 
208 

Hungary,  communism  in,  584 

Idleness,  three  main  types  of,  210. 
See  Unemployment 

Illiteracy,  degree  of,  in  United 
States,  283;  immigration  as  a 
factor  in,  283-284 

Immigration,  as  cause  of  unem- 
ployment, 221,  235;  in  relation 
to  population,  264-265;  history 
of,  in  United  States,  265-267; 
causes  of,  267-270;  recent 
changes  in  sources  of,  270-272; 
varying  points  of  view  concern- 
ing, 272-273 ;  question  of  proper 
distribution  of,  273-276;  eco- 
nomic aspects  of  problem,  276- 
282;  political  elements  in  prob- 
lem, 282-283;  as  a  factor  in 
illiteracy,  283-284;  argument 
for  restriction  of,  284-287; 
history  of  legislation  affecting, 
287-292;  Oriental,  292-296 

Income,  defined,  56;  distribution 
of  wealth  and,  57-60;  unequal 
distribution  of,  as  a  cause  of 
unemployment,  220 

Incorporation  of  labor  organiza- 
tions, arguments  for  and 
against,  384-386 

Indenturing,  of  servants,  in  colo- 
nial times,  27-29;  of  children,  in 
English  factory  system,  122 

Individualism,  doctrine  of, 
stressed  by  anarchism,  573 

Industrial  commissions,  testimony 


of,  regarding  hours  of  labor, 
113-114 

Industrial  Conferences,  National, 
at  Washington,  444 

Industrial  councils,  430,  449  ff.; 
history  of,  452-457;  type,  struc- 
ture, and  operation  of,  457-461 ; 
functions  of,  461-464;  typical 
plans,  464—468;  to  function  in 
conjunction  with  organizations 
of  labor,  471 

Industrial  Courts  Act,  British, 
430-431 

Industrial  disputes,  adjustment 
of,  415^447 

Industrialism,  rise  of  modern, 
14-15 

Industrial  News  Survey,  organ  of 
employers'  association,  407 

Industrial  Revolution,  English, 
15-22 

Industrial  training,  need  for,  519- 
521;  methods  of,  521-529; 
fundamental  principles  in,  529- 
530;  separate  department  for, 
530-531 

Industrial  unionism,  334-335 

Industrial  unrest,  problem  of,  298- 
329 

Industrial  Workers  of  the  World, 
organization  and  aims  of,  355- 
357 

Industry,  four  parties  to,  4-5;  in 
American  colonies,  25-27;  in- 
tegration of,  with  growth  of 
manufactures  in  United  States, 
34-37;  women  in,  146-176; 
sweating  system  in,  176-184; 
human  waste  in,  189-208;  evo- 
lutionary changes  in,  as  cause 
of  unemployment,  222-223; 
need  of  new  motive  in,  643-646 

Infant  mortality  rates,  relation  of 
earnings  to,  64 

Injunction,  use  of,  in  industrial 
disputes,  324-328 

Insurance,  by  trade  unions,  366- 
369;  plans  of,  for  employees, 
490-492.  See  Social  insurance 

Intelligence  offices,  regulation  of, 
239-242 

International  Association  for 
Labor  Legislation,  640-641 

International     Harvester     Com- 


Index 


657 


pany,  employee  representation 

plan  at,  464-465 

Internationals,  socialist,  573-575 
International  Typographical 

Union,  example  of  trade  union, 

334;    benefit  features  of,  367- 

368 
Inventions,  effect  of,  on  English 

industrial  life,  15 
Investigation,      compulsory,     for 

settling  industrial  disputes,  417- 

418,  436^38 
Iron  Law  of  Wages,  72 

Japanese,  problem  of  immigra- 
tion of,  292-294;  "gentlemen's 
agreement"  concerning,  295 

Job  analysis  and  specification, 
479-480 

Job  instruction  of  employees,  526- 
527 

Juvenile  delinquency,  due  to  child 
labor,  141-143 

Kansas,  pay  for  convicts  in,  616- 
617 

Kansas  Court  of  Industrial  Rela- 
tions Act.  427-430;  provision 
of,  regarding  minimum  wage, 
605 

Kellor.  Frances  A.,  Out  of  Work, 
cited,  172 

Knights  of  Labor,  illustrative  of 
labor  unionism,  334;  history  of. 
and  reasons  for  failure,  348-960 

Knights  of  St.  Crispin,  early  labor 
organization,  347 

Know  Nothing  Party,  288 

Kun,  Bela,  communist  activities 
of,  in  Hungary,  584 

Labor,  one  of  parties  to  industry. 
4-6;  systems  of,  in  evolution  of 
economic  society,  10-14;  con- 
ditions affecting,  in  American 
colonies,  25-27;  earnings  of, 
60-63;  problem  of  distribution 
of  product  of,  70-71 ;  determi- 
nation of  wages  of,  69-01; 
peculiar  characteristics  of  the 
supply  of,  91-94;  problem  of 
hours  of,  97-119  (aee  Hours  of 
labor) ;  creation  of  Department 
of,  419 


Labor  copartnership,  505-506; 
examples  of  successful  profit- 
sharing  and,  506-513 

Labor  Copartnership  Association 
of  Great  Britain,  506 

Labor  exchanges,  242-247 

Labor  legislation,  development  of, 
592-595;  for  protection  of 
children,  595-601;  for  protec- 
tion of  women,  601-602;  mini- 
mum wage  laws,  602-609;  af- 
fecting employment  of  adult 
male  workers,  609-611;  regu- 
lation of  physical  conditions  of 
employment,  611-614;  protec- 
tion of  worker  as  debtor  and 
creditor,  614-617;  attitude  of 
courts  toward  constitutionality 
of,  617-619:  associations  for 
promotion  of,  639-641 

Labor  market,  inadequate  organ- 
ization of,  as  cause  of  unem- 
ployment, 221-222 

Labor  organizations,  beginning  of, 
18-19;  attitude  of  immigrants 
toward,  280-281;  reasons  for, 
380-333;  history  and  types  of, 
330-362;  government,  aims  ana 
practices  of,  363-387 

Labor  Party  of  United  States,  or- 
ganization of,  379-380 

Labor  problems,  nature  of,  1-5; 
relation  of  study  of,  to  social 
sciences,  5-6;  methods  of  study 
of,  6-7;  emergence  of,  in  Eng- 
land, 9-23;  development  of,  ui 
United  States,  24-40;  analysis 
of,  41  ff.;  child  labor,  120-145; 
women  in  industry,  146-187; 
human  waste  in  industry.  189- 
208;  unemployment,  209-248; 
labor  turnover,  250-262;  im- 
migration, 264-296;  industrial 
unrest,  298-329;  agencies  «Dd 
methods  of  readjustment,  330 
ff.;  cooperation  in  relation  to, 
537-664;  •ocialimn  an  a  remedy 
for,  566-690;  basis  of  progress 
in  regard  to,  643-648 

Labor  reserve,  and  problem  of 
unemployment,  226-227 

Labor  turnover,  definition  of,  260; 
extent  of,  260-261;  computa- 
tion of,  252-263;  cause*  of,  263- 


6,58 


Index 


257 ;  in  relation  to  sex,  258-259 ; 
economic  waste  of,  259-260; 
social  aspects  of,  260-261; 
methods  of  reducing,  261-262 

Labor  union,  program  of,  dis- 
tinguished from  that  of  trade 
union,  334 

Laidler,  H.  W.,  socialist  indict- 
ment of  capitalism  summarized 
by,  576;  quoted,  580 

Laissez-faire,  doctrine  of,  20-21 

Land,  influence  of  free,  on  prob- 
lems of  labor,  38-39;  monopo- 
lization of,  as  cause  of  unem- 
ployment, 220-221 

Law,  study  of  labor  problems  as 
related  to,  5-6;  development 
of,  as  affecting  labor,  312-324; 
functions  of,  in  relation  to 
labor,  592.  See  Labor  legisla- 
tion 

Law  and  Labor,  organ  of  League 
for  Industrial  Rights,  395,  401 

League  for  Industrial  Rights,  395, 
401-403 

Legislation.  See  Labor  legisla- 
tion 

Leiserson,  W.  M.,  article  by, 
quoted,  482 

Length  of  service,  accidents  and, 
194-195 

Lescohier,  D.  D.,  The  Labor 
Market,  quoted  and  cited,  213, 
219,  264 

Lever  Brothers  Company,  co- 
partnership scheme  of,  51G-511 

Lighting,  legislative  provisions  for 
proper,  613 

Link,  H.  C.,  Employment  Psy- 
chology, cited,  527 

Literacy  tests  for  immigrants, 
290-291 

Lockouts,  as  factor  in  unemploy- 
ment, 227;  defined,  301;  de- 
velopment and  extent  of,  in 
United  States,  303-306;  econ- 
omic waste  of,  306-309 

Locomotive  Engineers,  Brother- 
hood of,  example  of  trade 
union,  334 

Loria,  A.,  Economic  Foundations 
of  Society,  quoted,  18 

Loss-sharing  by  employees,  plans 
for,  513-515 


Machinery,  effects  of  invention 
of,  on  labor,  15;  effects  of,  on 
employment  of  children,  138; 
safeguarding  of  workers  against, 
193,  612;  attitude  of  trade 
unions  toward,  372-373 

Mclntire,  Ruth,  quoted,  131,  141 

Maison  Leclaire,  profit-sharing  by 
the,  506-507 

Malthas,  law  of  population  of,  9 

Management,  one  of  four  parties 
to  industry,  4-5;  deficiencies 
in,  a  contribution  to  unem- 
ployment, 227-228 

Mann,  A.,  Women  Workers  in 
Factories,  cited,  181 

Manorial  system  in  England,  11 

Manufactures,  beginning  and  de- 
velopment of,  in  United  States, 
30-34;  growth  of,  and  integra- 
tion of  industry,  34-37 

Marot,  Helen,  Creative  Impulse  in 
Industry,  quoted,  521-522 

Married  women  in  industry,  173- 
176 

Marx,  Karl,  theory  of,  as  to  wages, 
82-84;  development  of  scien- 
tific socialism  by,  569-570,  576- 
579 

Mediation,  defined,  416;  advan- 
tages and  disadvantages  of, 
436-438 

Mediation  and  arbitration,  state 
boards  of,  425-430 

Medical  departments  in  industrial 
concerns,  483 

Meeker,  Royal,  quoted  on  stand- 
ards of  living,  47-48;  on  wages 
of  women,  161 

Metal  Trades  Association,  black- 
list of,  302-303 

Migratory  laborer,  the,  231-233 

Mill,  J.  S.,  quoted,  73 

Mines,  employment  of  boys  in, 
129,  597;  accidents  connected 
with  work  in,  192,  194 

Minimum  wage  laws,  account  of, 
602-609 

Mitchell,  H.  H.,  article  by,  cited, 
137 

Mitchell,  John,  402;  Organized 
Labor  by,  quoted,  411 

Money  of  immigrants,  281-282 

Mothers'  pensions,  634-635 


Index 


659 


National  Association  of  Manu- 
facturers, 400-401 

National  Civic  Federation,  409 

National  Consumers'  League, 
White  List  of,  183-184;  work 
of,  639 

National  Erectors'  Association, 
409 

National  Founders'  Association, 
403-405 

National  Industrial  Board,  plan 
for,  445-446 

National  Industrial  Conference 
Board,  406-407 

Nationalization  of  industries,  343- 
344,  384-385 

National  Metals  Trades  Associa- 
ti9n,  405-406 

National  Safety  Council,  work  of, 
486-487 

National  War  Labor  Board,  424- 
425 

Nebraska,  constitutional  provi- 
sion in,  for  industrial  court,  430 

Nelson  Company.  St.  Louis,  profit- 
sharing  plan  of,  511 

Newlands  Act  of  1913,  419,  421 

Newman,  B.  J.,  article  by,  cited, 
204 

Newsholme,  A.,  Vital  Statistics, 
cited,  63 

New  Zealand,  governmental  ad- 
justment i  >f  industrial  disputes 
in,  432-433;  minimum  wage 
legislation  in,  603 

Night  work,  comparative  pro- 
ductivity of  day  work  and,  106- 
108;  by  children  in  industry, 
133 

Non-union  shops,  union  shops 
versus,  377-379 

Normal  value  theory  of  wages, 
77-79 

Occupational  diseases,  197-200; 
responsibility  of  employers  and 
employees  for,  200-201 

Occupations,  distribution  of  in- 
dustrial accidents  by,  191-193 

Old  age  pcnuions,  forms  of,  631- 
634 

"One  big  union,"  plan  for,  384 

Open  Shop  Review,  organ  of  em- 
ployers associations,  405 


Open  shop  versus  closed  shop, 
375T379 

Organization,  lack  of,  among 
women  workers,  157-158;  a 
deterrent  of  sweatshop  condi- 
tions, 184;  reasons  for,  330-333 

Organizations,  labor,  330-387; 
employers',  389^414 

Orientals,  restriction  of  immigra- 
tion of,  292-296 

Output,  hours  of  labor  in  relation 
to,  111-113;  unionist  restric- 
tion of,  370-372 

Overtime,  pros  and  cons  of,  108- 
110 

Owen,  Robert,  quoted  on  hours  of 
labor,  97;  interest  of,  in  educa- 
tional reform,  342;  father  of 
cooperative  movement  in  Brit- 
ish Isles,  541 

Padrone  system,  the,  284 

Parker,  Carleton  H.,  cited,  61 

Parties  to  industry,  the  four.  4-5 

Tart-time  schools,  vocational  edu- 
cation in,  523-525 

Patrons  of  Industry,  history  of, 
546 

Pauper-poverty  standard  of  living, 
43 

Pay.    See  Wages 

Pensions,  for  employees,  490-491 , 
old  age,  631-634;  mothers', 
634-635 

People's  Banks  in  Germany,  559 

Personnel  administration,  475- 
495;  conditions  for  successful, 
495;  cost  of,  495-496;  con- 
clusions concerning.  409 

Philadelphia  Rapid  Transit  Com- 
pany, Cooperative  Welfare 
Association  of,  467;  employee 
representation  plan  of,  467-468 

Picketing,  defined,  301 ;  laws  and 
legal  decisions  governing,  319- 
321 

Piece-wage  system   of  payment, 

I'.K 

Placement  bureaus,  for  child 
workers,  144;  industrial  trage- 
dies discovered  by,  533-634. 
See  Employment  exchanges 

Plant  representation  pinna,  449- 
473 


Index 


Plumb  plan  for  nationalization  of 
railroads,  384-385 

Politics,  study  of  labor  problems 
as  related  to,  5-6;  results  of 
immigration  on,  282-283 ;  activ- 
ities of  organized  labor  in,  379- 
380 

Population,  a  condition  in  de- 
termining economic  evolution, 
9;  statistics  of,  in  United  States, 
37-38;  relation  between  immi- 
gration and,  264-265 

Post  Office  Department,  U.  S., 
council  system  in,  472 

Pottery  makers,  diseases  of,  199 

Predatory  unionism,  characteris- 
tics of,  336T337 

Price  fluctuations,  influence  of,  on 
cost  of  living,  48-49 

Printing  trades,  agreement  con- 
cluded in,  442-443 

Procter  and  Gamble,  profit-shar- 
ing plan  of,  512-513 

Producers'  cooperation,  551-557 

Productivity  theory  of  wages,  75- 
77 

Profit-sharing,  reduction  of  labor 
turnover  by,  261-262;  account 
of,  500;  purposes  of,  500;  forms 
and  methods  of,  500-502;  con- 
ditions of  participation,  503; 
historical  sketch  of,  503-505; 
types  of  establishments  in  which 
applied,  505;  examples  of  suc- 
cessful, 506-513;  loss-sharing 
as  opposed  to,  513-515;  failures 
of,  515-516;  opposition  of  or- 
ganized labor  to,  516;  benefits 
of,  516-517 

Promotions  of  employees,  480-481 

Psychology,  study  of  labor  prob- 
lems as  related  to,  5-6 

Public,  as  one  of  four  parties  to 
industry,  4-5 

Quarries,  employment  of  boys  in, 
129,  597;  statistics  of  accidents 
in,  192 

Quasi-anarchism,  philosophy  of, 
in  syndicalism,  357 

Raffeisen  banks,  558-559 
Railroad  Labor  Board,   creation 
and  powers  of,  422-424 


Railroads,  plan  for  nationaliza- 
tion of,  384-385 

Railroad  Wage  Commission,  422 

Recreation,  provision  for,  for  em- 
ployees, 488-490 

Regional  Adjustment  Conference, 
plan  for,  444-445 

Regional  Board  of  Inquiry,  445 

Remuneration,  industrial,  498- 
500.  See  Wages 

Residual  claimant  theory  of  wages, 
74-75 

Restriction  of  output  by  trade 
unions,  370-372 

Revolutionary  unionism,  char- 
acteristics of,  335-336 

Rochdale  plan  of  cooperation, 
541-542 

Rockefeller,  J.  D.,  Jr.,  Representa- 
tion in  Industry,  quoted,  452, 
477 

Rogers,  Helen  W.,  quoted,  534 

Russia,  bolshevism  in,  584 

Sabotage,  defined,  356 

Safety-First  Movement,  485-488 

Schloss,  D.  F.,  Methods  of  Indus- 
trial Remuneration,  cited,  499 

Schools,  faulty  curriculums  of, 
and  effects  on  child  labor,  139. 
See  also  Education 

Scientific  attitude,  necessity  for, 
in  study  of  labor  problems,  2-3 

Scientific  management,  theory  and 
working  out  of,  475-476 

Seasonal  fluctuations,  as  cause  of 
unemployment,  223-225 

Seasonal  industries,  regulation  of, 
235 

Servants,  indentured,  in  American 
colonies,  27-29 

Sherman  Anti-Trust  Act  of  1890, 
316,  317 

Shop  committees,  nature  of,  450; 
historical  development  of,  452- 
457;  functions  of,  461-464; 
precautions  followed  in  intro- 
ducing systems  of,  464 ;  typical 
plans,  464-468;  objections  of 
organized  labor  to,  468-470 

Sickness,  among  child  workers, 
136-137 

Simons,  A.  M.,  Social  Forces  in 
American  History,  cited,  28 


Index 


661 


Skill,  relation  of,  to  labor  turn- 
over, 257-258 

Slavery,  stage  of,  in  economic  or- 
ganization?  10,  11;  introduced 
into  Amenca,  27-30 

Sliding  scale,  system  of,  applied 
to  wages,  499 

Social  insurance,  nature  of,  621; 
employers'  liability,  621-623; 
workmen's  compensation  laws, 
623-628;  health  insurance,  628- 
631;  old  age  pensions,  631-634; 
mothers'  pensions,  634-635;  un- 
employment insurance,  635- 
639;  associations  for  promo- 
tion of,  639-641 

Socialism,  wage  theory  held  by, 
82-84;  definition  of,  566-567; 
types  of,  567-572;  relation  of, 
to  trade  unionism,  syndicalism, 
and  anarchism,  572—573;  in- 
ternationals of,  573-575;  in- 
dictment of  capitalism  by,  575- 
576;  doctrines  of  Marxian,  576- 
579;  aims  of,  580-581;  objec- 
tions to,  581-584;  growth  of, 
and  reasons  for  growth.  584- 
586;  tendencies  toward,  and 
conclusions  concerning,  588-590 

Socialism  of  the  Chair,  570 

Social  sciences,  relation  of  study 
of  labor  problems  to,  5-6 

Sociology,  study  of  labor  prob- 
lems as  related  to,  5-6 

Southern  Pacific  R.  R.,  corpora- 
tion school  of,  532-533 

South  Metropolitan  Gas  Com- 
pany of  London,  profit-sharing 
scheme  of,  509-510 

Sovereigns  of  Industry,  a  coopera- 
tive  movement,  546 

Spahr,  C.  B.,  work  by,  cited,  59 

Spargo,  J.,  Bitter  Cry  of  the  Chil- 
dren, cited,  63 

Standard  of  living,  defined,  41; 
variation  in,  at  different  times, 
•11  l_>;  forces  affecting,  42-43; 
types  of,  and  budget  levels,  43- 
44;  the  minimum  quantity,  44- 
48;  as  basis  for  wage  adjust- 
ments, 50-54;  relation  of  im- 
migration to,  278-279;  of  Ori- 
ental immigrants.  292 

States,  legislation  in,  for  adjust- 


ment of  industrial  disputes, 
425-430 

State  socialism,  570 

Statutes  of  Laborers,  English,  12- 
13 

Stevens,  Uriah  S.,  founder  of 
Knights  of  Labor,  348 

Stock  distribution,  method  of 
profit-sharing,  500,  501-502 

Stove  Founders'  National  Defense 
Association,  409 

Strikes,  as  factor  in  unemploy- 
ment, 227;  definition  and  classi- 
fication of,  299-300;  general, 
300;  sympathetic,  300-301;  de- 
velopment and  extent  of,  in 
United  States,  303-306;  eco- 
nomic waste  of,  306-309;  legal 
decisions  pertaining  to,  315- 
316;  violence  and  force  in,  328 

Suicide,  relation  of  rate  of,  to 
unemployment,  212-213 

Sullivan,  J.  W.,  on  profit-sharing, 
516 

Sunday,  arguments  against  labor 
on,  110-111 

Sweating  system,  the,  176-184; 
legislation  regarding,  604 

Syndicalism,  defined,  356;  rela- 
tion of,  to  socialism,  573 

Taff  Vale  case,  decision  in,  313- 
314 

Tariff,  the,  and  unemployment, 
230 

Taussig,  F.  W.,  wage  theory  of, 
87-88 

Tead  and  Metcalf,  Personnel 
Administration,  cited,  253,  477 

Toynbee,  Arnold,  The  Industrial 
Revolution,  quoted,  16 

Trade  agreements,  defined,  415- 
416:  operation  of,  438-439;  in 
clothing  industry,  439-442;  in 
printing  trades,  442-443;  in 
building  trades,  443-444 

Trades,  training  of  workers  for, 
234 

Trade  unionism,  origin  of.  338- 
339;  emergence  o?Tin  United 
Stem,  339-340;  revival  of,  in 
period  1857-1866,  344;  women 
and,  361-362;  relation  of  so- 
cialism to,  572-573 


662 


Index 


Trade  unions,  as  American  labor 
problem,  1 ;  legal  status  of,  312- 
324;  history  of,  330-333;  de- 
nned, 333-334;  difference  be- 
tween labor  unions  and,  334; 
aims,  ideals,  and  practices  of, 
365-375;  political  policy  of, 
379-380;  jurisdictional  disputes 
among,  380-382;  active  inter- 
est of,  in  education,  382-384; 
recent  tendencies  of,  384-385; 
incorporation  of,  385-387;  at- 
titude of,  toward  employers' 
associations,  410-413;  shop  or- 
ganizations introduced  to  offset, 
452;  objections  of,  to  company 
unions,  468-470;  attitude  of 
revolutionary  communism  to- 
ward, 588 

Tradition,  influence  of,  on  low 
wages  of  women,  159-160 

Tramps,  migratory  laborers  and, 
231 

Transfers  of  employees  from  one 
job  to  another,  480 

Transportation  Act  of  1920,  419 

Tuberculosis,  among  occupational 
diseases,  198,  199-200;  decline 
in  death  rate  from,  202 

Turnover,  labor,  among  women, 
171.  See  Labor  turnover 

Unemployment,  percentage  of, 
among  children,  134-135; 
among  women  in  industry,  171- 
173;  nature  of,  and  scope  of 
term,'  209-210;  distinctions 
necessary  in  analyzing  problem 
of,  210;  social  and  economic 
significance  of  problem,  211- 
213;  demand  and  supply  in 
relation  to,  213-215;  estimates 
of  extent  of,  215-219;  causes 
of,  classified,  219-220;  discus- 
sion of  conditions  causing,  220- 
231;  the  migratory  laborer, 
231-233;  incidence  of,  233; 
methods  for  reduction  and  pre- 
vention of,  234-248 

Unemployment  insurance,  sys- 
tems of,  635-639 

Unionism,  types  of,  333-338; 
origin  of,  338-339;  lessons  con- 
cerning, derived  from  history 


of  labor  movement,  357-359; 
international  growth  of,  359- 
360;  aims,  ideals  and  practices 
of,  365-375 

Union  label,  use  of,  and  legal 
decisions  affecting,  321-323 

Unions.    See  Trade  unions 

United  Kingdom,  cooperative 
movement  in,  541-544;  coop- 
erative production  in,  552-554 

United  States,  development  of 
labor  problems  in,  24-40;  prob- 
lem of  hours  of  labor  in,  101- 
104;  rise  of  child  labor  prob- 
lem in,  124^126;  history  of 
immigration  in,  265-267;  laws 
and  activities  of  federal  govern- 
ment, for  adjustment  of  indus- 
trial disputes,  418-^430;  coop- 
erative movement  in,  544-551; 
producers'  cooperation  in,  554- 
556;  cooperative  credit  in,  559- 
560;  cooperative  banking  ex- 
periments in.  561-562;  recent 
developments  in  socialistic 
movement  in,  586-588;  labor 
legislation  in,  595 

United  States  Steel  Corporation, 
results  of  safety-first  movement 
to,  486-487 

United  Typothetae,  the,  409 

Unity  centers,  establishment  of, 
383 

Unrest,  social,  due  to  unemploy- 
ment, 213 

Utopianism  and  political  experi- 
ments, period  of,  in  develop- 
ment of  trade  unionism,  341- 
343 

Utopian  socialism,  567-568 

Van  Klecck,  Mary,  article  by, 
quoted,  153 

Ventilation,  lack  of,  as  cause  of 
disease,  197-198;  disregard  for, 
under  padrone  system,  284; 
legislative  provisions  regard- 
ing, 613 

Versailles  treaty,  provisions  of, 
affecting  labor,  640-641 

Vestibule  schools,  vocational  train- 
ing in,  526-527 

Vocational  training,  as  remedy 
for  unemployment,  234-235; 


Index 


663 


need  for,  519-521;  account  of, 
in  United  States,  521-526;  in 
industry,  526-529;  advantages 
of,  533-534 

Voluntary  arbitration,  procedure 
called,  417. 


Wages,  standard  of  living  as  basis 
for  adjusting,  50-54;  defini- 
tions of  wealth,  income,  and,  56 ; 
prevailing  rates  of,  59-63;  social 
by-products  of  low,  63-65; 
economy  of  adequate,  65-67; 
determination  of.  69  n.;  sys- 
tem of,  identified  with  modern 
industrialism,  69-70;  cost  of 
subsistence  theory  of,  71-73; 
wages-fund  doctrine  of,  73-74; 
residual  claimant  theory  of,  74- 
75;  specific  productivity  theory 
of,  75-77;  normal  value  or  ex- 
change theory  of,  77-79;  bar- 
gaining theory  of,  79-82;  social- 
ist explanation  of,  82-84;  mis- 
cellaneous theories  of,  84-91; 
factors  influencing  bargaining 
concerning,  94-95;  of  child 
workers,  131-132;  standards 
of,  recommended  for  children, 
144;  of  women  in  industry,  153- 
155;  under  sweating  and  home- 
work systems,  181-182;  formu- 
lation of  standards  of,  for 
women,  185;  influence  of,  on 
immigration,  267-268;  of  recent 
immigrants,  279-280;  losses  in, 
due  to  strikes  and  lockouts,  306- 
309.  See  also  Profit-sharing 
and  Labor  copartnership 
Wage  scales,  as  index  of  earnings, 

05 

Wagwi-fund  doctrine,  73-74 
Wage  system,  rise  of  modern,  18 
Walker,  F.  A .,  Political  Economy, 

quoted,  123 

Waste,  human,  in  industry,  189- 
208;  among  wage-earners,  due 
to  unemployment,  212;  in 
methods  of  commodity  distri- 
bution, and  result  on  unem- 
ployment, 228;  of  labor  turn- 
over, 259-260;  attached  to 
strikes  and  lockout*,  306-309 


Watkins,  G.  S.,  Cooperation — A 
Study  in  Constructive  Economic 
Reform,  cited.  537 

Wealth,  defined,  56;  relation  be- 
tween economic  status  and,  56- 
57;  distribution  of,  and  of  in- 
come, 57-60;  earnings  of  labor 
contrasted  with,  59-63;  un- 
equal distribution  of,  as  a 
cause  of  unemployment,  220 

Webb,  Sidney  and  Beatrice,  books 
by,  cited  and  quoted,  50,  314, 
331,  332,  338,  370;  among 
sponsors  of  Fabian  School  of 
Socialists,  571 

Welfare  service  for  employees, 
490-494 

Western  Federation  of  Miners, 
withdrawal  of,  from  I.  W.  W., 
356 

Whitelist,  defined,  303;  use  of,  324 

Whitley  plan  for  industrial  coun- 
cil, 431,  471 

Wholesales,  cooperative,  in  Great 
Britain,  543-544;  in  United 
States,  548-549 

Willoughby,  W.  F.,  article  by, 
cited,  391,  396 

Wilson,  President.  Industrial  Con- 
ferences called  by,  444 

Women,  as  an  economic  factor, 
146-147;  growth  in  employ- 
ment of,  147-150;  present-day 
occupations  of,  150-151;  com- 
petition of,  with  men,  151-153; 
wages  of,  153-155;  reasons  for 
low  wages  of,  155-161;  move- 
ment for  equal  pay  for  equal 
work,  161-163,  185;  compara- 
tive efficiency  of,  163-166;  in- 
dustrial training  of,  166-167; 
problem  of  hours  of  labor  for. 
167-171;  labor  turnover  and 
unemployment  among,  171- 
173;  married,  in  industry,  173- 
176:  sweated  work  and  indus- 
trial homework  done  by,  176- 
184;  formulation  of  standards 
of  employment,  184-186;  in- 
dustrial accidents  among,  192; 
rate  of  labor  turnover  tor,  as 
compared  with  men,  258-259; 
and  trade  unionism,  361-362; 
protective  legislation  for,  601- 


664 


Index 


602;  health  insurance  for,  629, 
631 

Woodbury,  H.  S.,  articles  by, 
cited,  133,  134,  135,  136 

Woodbury,  R.  M.,  article  by, 
cited,  129 

Work-day,  advantages  and  dis- 
advantages of  shorter,  104-105; 
the  twelve-hour,  105-106;  move- 


ment for  eight-hour,  114-118; 

for    women,    167-171.         See 

Hours  of  labor 
Workmen's    compensation    laws, 

196,  623-628 

Works  council,  the,  450;   histori- 
cal  development  of,   452-457; 

at      International      Harvester 

Company,  464-465 


UNIVERSITY  OF  C4LIFORMA  LIBRARY 

Los  Angeles 
This  book  b  DUE  on  the  last  date  stamped  below. 


JUN12 


HOV  14 

MOV 

3 197? 
JAN  2  7  1975 

JAH  o  '  -3   PI 
JW- 


Torn  L9-Serie«  444 


L  OO5  057  388  0 


001176648    2 


